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Major Changes concerning Taxation of Government Bonds from January 2016

  • ○ Taxation concerning resident individuals

    • Tax is levied on capital gains concerning JGBs.
    • Tax on profits from redemption of discount bonds issued from January 1, 2016, onward is withheld at source upon redemption.
    • Interest, capital gain and redemption profits from JGBs are allowed for profit/loss offset between those incomes as well as other incomes from listed shares, etc.
     20160122_01 
  • ○ Tax exemption scheme for nonresident individuals, etc.

    • Interest received by nonresident individuals and foreign corporations from January 1, 2016, onward is fully exempted from income tax regardless of the period of ownership, provided that certain requirements have been met.
    • In line with the above measure, the statement of the holding period, which used to be submitted to the District Director of the Nihonbashi Tax Office, and the tax-exempt account system are abolished.
    • Meanwhile, the Application Form for Withholding Tax Exemption should be replaced in every five years.
    • Profits from the redemption of discount bonds received by nonresident individuals and foreign corporations are exempted from tax, provided that requirements similar to those of the tax exemption scheme concerning interests have been met.
     20160122_02