・ "JGBs" in this section are book-entry transfer JGBs unless stated otherwise.
The Application Form for Approval must be accompanied by a document certifying the approval by the BOJ as FIPs, a document stating the commitment to submit promptly upon the request of the District Director of the Regional Tax Offices(RTO) the necessary documents to determine whether the tax exemption scheme is fairly applied, a document stating the commitment to verify the identity of the investor who has submitted the Application Form for Withholding Tax Exemption, and other relevant documents.
1. What is a qualified foreign intermediary (QFI)?
A QFI is a foreign financial institution, etc., such as a global custodian, which has been:
The tax exemption scheme for interest, etc. on JGBs is only applicable to those who hold JGBs in the book-entry transfer account opened with the JGB Book-Entry System Participant in Japan (JBESP) or with the QFI. Therefore, it will not apply to cases where JGBs are held in transfer accounts opened with foreign financial institutions without QFI status.
Please click here for the roles of QFIs under the tax exemption scheme for coupon-bearing bonds, T-Bill and STRIPS.
- designated as the account management institution prescribed in the Act on Book-Entry Transfer of Company Bonds, Shares Article 44 (1) (xiii); and
- approved by the Bank of Japan (BOJ) as a foreign indirect participant (FIP) in the JGB Book-Entry System,
The tax exemption scheme for interest, etc. on JGBs is only applicable to those who hold JGBs in the book-entry transfer account opened with the JGB Book-Entry System Participant in Japan (JBESP) or with the QFI. Therefore, it will not apply to cases where JGBs are held in transfer accounts opened with foreign financial institutions without QFI status.
Please click here for the roles of QFIs under the tax exemption scheme for coupon-bearing bonds, T-Bill and STRIPS.
2. Application procedures for QFI status
Application for Approval
In order to obtain approval to become a QFI, the foreign financial institution is required to submit the Application Form for Approval [PDF] to the Commissioner of the NTA via the BOJ.The Application Form for Approval must be accompanied by a document certifying the approval by the BOJ as FIPs, a document stating the commitment to submit promptly upon the request of the District Director of the Regional Tax Offices(RTO) the necessary documents to determine whether the tax exemption scheme is fairly applied, a document stating the commitment to verify the identity of the investor who has submitted the Application Form for Withholding Tax Exemption, and other relevant documents.
Notice of Approval
When the Commissioner of the NTA has approved an applicant as a QFI, such decision will be notified in writing. Please note, the application can be deemed to be approved on the date of the end of the month following the month in which the application submission date falls, unless approval or rejection has been noticed by such date.
Rejection of Application
The Commissioner of the NTA may reject an application for the approval of QFI status if the applicant meets any of the following grounds. When the Commissioner of the NTA rejects the application, such rejection will be notified in writing.- (1) If the descriptions in the application form are insufficient or false;
- (2) If the applicant is currently delinquent in some of its national tax payment, and it is deemed difficult for the applicant to pay the delinquent tax; or
- (3) If it is deemed difficult for the applicant to prepare the books for JGBs, or to give notice of the name, etc. of the person who has submitted the Application Form for Withholding Tax Exemption.