Japan: Tax treatment of income | KPMG | GLOBAL
Share with your friends

Japan: Tax treatment of income from U.S. limited partnerships

Japan: Tax treatment of income

Japan’s National Tax Agency (NTA) today released a statement concerning the tax treatment of income derived through a U.S. limited partnership by Japanese resident partners.


Related content

The statement (English) [PDF 8 KB] was posted on the tax agency’s website, and was released in response to concerns that a U.S. limited partnership would be treated as an “opaque entity” after a 2015 decision of Japan’s Supreme Court. In that decision, the Supreme Court held that a U.S. Delaware limited partnership was to be treated as a corporation for Japanese tax purposes.

In today’s statement, the NTA clarified:

  • That it would treat a U.S. limited partnership that has not made an election to be classified as a corporation for U.S. federal tax purposes as a fiscally transparent entity; and 
  • That a Japanese resident (1) that derives income through a U.S. limited partnership, and (2) that meets all other requirements under the income tax treaty between Japan and the United States would be eligible to claim treaty benefits.


Read a February 2017 report [PDF 94 KB] prepared by the KPMG member firm in Japan

The KPMG logo and name are trademarks of KPMG International. KPMG International is a Swiss cooperative that serves as a coordinating entity for a network of independent member firms. KPMG International provides no audit or other client services. Such services are provided solely by member firms in their respective geographic areas. KPMG International and its member firms are legally distinct and separate entities. They are not and nothing contained herein shall be construed to place these entities in the relationship of parents, subsidiaries, agents, partners, or joint venturers. No member firm has any authority (actual, apparent, implied or otherwise) to obligate or bind KPMG International or any member firm in any manner whatsoever. The information contained in herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at: + 1 202 533 4366, 1801 K Street NW, Washington, DC 20006.

Connect with us


Request for proposal