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法定監査
太陽有限責任監査法人は、法律によって義務付けられた各種の監査を提供しています。
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任意監査(IPO)及び関連サービス
太陽有限責任監査法人は、上場を目指す多くの会社に、豊富な経験に基づき、株式公開準備のための監査を提供しています。
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その他任意監査
太陽有限責任監査法人は、経営者等の依頼に基づく各種の監査を提供しています。
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情報セキュリティ監査
情報セキュリティに係るリスクアセスメントに基づく適切なコントロールの整備状況及び運用状況を検証又は評価して、情報セキュリティの適切性に保証を与え、或いは情報セキュリティの改善に役立つ的確な助言をしております。
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ビジネス税務
永年培ってきた経験とノウハウをベースとしたプロフェッショナルサービスをスピーディ-に提供します。
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プライベート税務
ファミリービジネス(オーナー系企業)に対して、税のみならず民法・会社法など様々な分野において総合的にソリューションを提供します。
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インターナショナル税務
これまで蓄積した知識とグラントソントンのネットワークを活用し、複雑化する国際課税問題に対応します。
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トランザクション税務
デューデリジェンスの初期の段階から、ストラクチャーの実現支援まで、税務がトランザクションに与える影響を考慮し、税務の観点からのみならず、事業価値評価、事業再編等に関わる計画策定から実行まで含めたトータルサポートを提供します。
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M&Aアドバイザリー
高い専門性と豊富な経験を有したプロフェッショナルが、M&Aや事業再編の検討から交渉・実行、及び統合までの様々なプロセスをサポートし、クライアントの成長を支援いたします。
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ビジネスリスクサービス
企業は、ステークホルダーの期待・要求に応え、経営目的を実現するために、有効なガバナンス体制を構築するとともに、適切なリスクテイクを支える環境を整備することが求められています。
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IT&オペレーションズ
データにもとづく製品・サービス品質の向上、規模・範囲の拡大、収益性・効率の改善はクライアントの成長と競争に大きなチャンスをもたらします。
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IPO支援
IPOを実現させるためには、証券取引所が定める上場審査基準を順守し、日本経済を活性化する上場企業としてふさわしい企業経営を行うことが求められます。
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会計アドバイザリー
監査法人での監査経験や事業会社での管理実務等の経験の豊富なプロフェッショナルが、会計・内部統制を中心とした様々なニーズに対応するサービスを提供します。
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フォレンジック&サイバー
最新の調査手法とITテクノロジーを活用し、国内及び海外の不正・不祥事、情報漏洩、サイバー攻撃等の事実解明調査や、これらの防止対策構築の支援を行い、クライアントの社会的価値の確立・維持・向上をサポートします。
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サステナビリティアドバイザリー
企業が高品質なサステナビリティ情報を開示をできるよう、企業に寄り添った支援を提供します。
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中国ビジネス
日本・中国の国境を跨ぐビジネスのパートナーとして、豊富な知識と経験を活かし、最高のサービスを提供します。 我々は、日本と中国のビジネス環境を熟知し、両国の法制度や税制に精通しています。 クライアントのニーズに合わせた的確なアドバイスを提供し、ビジネスの成功に貢献します。
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パブリックセクター
太陽グラントソントンは、パブリックの専門家チームが、パブリックセクターが直面する課題に真摯に向き合い、理解し、最適なプロフェッショナルサービスを提供していきます。
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給与・人事労務
私たちは、事業を展開するにあたって「人」にまつわる給与・人事労務・所得税・在留資格など幅広い分野を横断的・総合的に、グローバルな見地から支援することを目指します。

The Foreign tax credit system is designed to avoid international double taxation. It allows a corporation to deduct, within certain limits, the amount of foreign corporate income tax paid or withheld abroad from its corporate tax liability. A domestic corporation and a foreign corporation which has a permanent establishment in Japan are allowed to take advantage of the foreign tax credit. The following explanations are for a domestic corporation. A foreign corporation is able to take foreign tax credit for eligible foreign taxes on income attributable to a permanent establishment in Japan.
1. Definition of Foreign taxes to be eligible for the tax credit
The following types of foreign corporate taxes are considered eligible for the foreign tax credit under Japanese tax law:
Taxes imposed under foreign legislation where the corporation’s income serves as the basis for taxation
(a) Taxes imposed under foreign legislation where the corporation’s income serves as the basis for taxation
(b) Taxes imposed based on gross revenue instead of income, such as withholding taxes on dividends, royalties, interest, and professional service fees
On the other hand, the following types of taxes are not eligible for the foreign tax credit:
(c) Taxes that are not income based, such as value-added tax
(d) Taxes which are imposed at a rate higher than the reduced rate stipulated on a relevant tax treaty.
(e) Taxes for which the taxpayer is entitled to request a full or partial refund at their discretion after payment
(f) Surcharges, such as penalties and interest
2. The foreign tax credit limitation
2-1. Formula to calculate the foreign tax credit limitation
The foreign tax credit limitation is calculated below:
Japan corporate income tax for the year x Adjusted foreign source income for the year / Worldwide income for the year
The above formula represents the corporate tax credit limit. As for the credit limit for inhabitant tax, which is a part of local taxes, it is generally calculated by multiplying the corporate tax credit limit by the inhabitant tax rate.
2-2. Adjusted foreign source income
(a) Adjusted foreign source income is calculated as foreign source income minus non-taxable foreign source income.
(b) Foreign source income includes income attributable to foreign permanent establishments, as well as the other foreign source income such as dividends, interest, royalties, and service fees excluding those attributable to foreign permanent establishments.
(c) Non-taxable foreign source income refers to foreign source income that is not taxed due to local or tax treaty rules.
(d) Adjusted foreign source income for the year is capped at 90% of worldwide income for the year.
(e) Direct expenses that are directly attributable to foreign-source income must be deducted from foreign source income.
(f) Common expenses incurred in relation to both foreign-source income and domestic-source income, the portion attributable to foreign-source income must be reasonably allocated using an appropriate allocation method in accordance with the Corporation tax law and deducted accordingly.
2-3. Carried forward system
Foreign taxes in excess of the credit limitation can be carried
forward for up to three years. Unused portion of foreign tax credit limitation can be carried forward for up to three years.
3. Tax sparing credit
Tax sparing credit enables certain tax incentives granted by developing countries such as tax exemptions or reductions to be treated as if tax had actually been paid. Under this system, taxpayers can claim a foreign tax credit for amounts that would have been payable if such incentives had not been granted. This preserves the benefit of the local tax relief while avoiding double taxation in Japan. The application of tax sparing credits is based on specific provisions included in Japan’s bilateral tax treaties. As of now, the tax sparing credit is effective under Japan’s tax treaties with six countries: Zambia, Sri Lanka, Thailand, China, Bangladesh, and Brazil. Among these, China is notable for its frequent application, particularly with respect to royalty payments. For example, in case where China imposes a 10% withholding tax on royalties, the Japan-China tax treaty allows for a deemed credit of 20% under the article 23③(c).
4. Timing of applying the foreign tax credit
In principle, the foreign tax credit is applied in the fiscal year that includes the date on which the foreign tax is paid. In the case of a self-assessment system, the date on which the foreign tax is paid refers to the date of filing the tax return. In the case of a withholding tax system, it refers to the date of payment of interest, dividends, or royalties subject to withholding tax.
5. Filing requirement
In order to claim a foreign tax credit, taxpayers must submit a detailed schedule with the final corporate tax return and to retain supporting documentation evidencing the imposition of the relevant foreign income tax. This documentation may include, but is not limited to, copies of foreign tax returns, certificates of tax payment, official tax assessment notices, and withholding tax certificates.
6. Treatment of Foreign tax credits on withholding tax imposed on Service provision
When a company provides services to an overseas client, withholding tax may be imposed under the domestic laws of source countries. However, under Japan’s tax treaties (excluding certain jurisdictions, such as India), income derived from the provision of services is generally classified as business income. These incomes are only taxable in the source country if the Japanese company has a permanent establishment (hereinafter referred to as a PE) there. Accordingly, withholding tax should not be levied in the absence of a PE. Nevertheless, in practice, some countries may impose withholding tax even where no PE exists. In such cases, the portion of tax withheld that exceeds the maximum rate permitted under the applicable tax treaty is not eligible for foreign tax credit relief in Japan. To recover the excess tax, the taxpayer must apply a refund claim with the relevant foreign tax authority. If a refund is not obtained, the excess amount, although not creditable under Japan’s foreign tax credit system, is treated as a deductible expense in the fiscal year that includes the payment date.
7. Tax planning of choosing between tax credit and tax deduction
Taxpayers may elect to treat foreign taxes either as a tax credit or as a deductible expense. This election must be made consistently for all foreign taxes incurred during the fiscal year. As a general rule, applying the foreign tax credit is more beneficial, as it directly reduces Japanese corporate tax liability. However, in cases where continued tax losses are anticipated, or under certain other circumstances, it may be more beneficial to treat the foreign tax as a deductible expense. In such cases, the amount can be carried forward as part of taxable losses for up to ten years. Please note that once the deduction method is elected, any previously carried forward unused portion of foreign tax credits limitation or excess credit limitation will lapse at that time. Therefore, we recommend carefully considering which method is more beneficial based on company’s future plans.
Should you have any questions regarding this topic or wish to discuss potential tax planning strategies, please do not hesitate to contact us.
税務・会計・監査・アドバイザリーに関わる最新のニュースをお届けします。