Unveiling the AI Legalese Decoder: Simplifying the Process of Filing UK Equivalent of W8-BEN-E for Royalties from Japan
- May 26, 2024
- Posted by: legaleseblogger
- Category: Related News
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## Addressing Taxation Withholding Issues with UK Clients
I am a permanent resident of Japan, providing translating and writing services through a godo kaisha (a type of corporation). Recently, I signed a contract to translate a book for a UK-based publisher in London. The payment terms in the contract specify royalties, with an advance payment due before any royalties are earned – half at the beginning of the project and the other half upon delivery.
In my dealings with US clients, I typically send a W-8BEN-E form and invoice them for the full contract amount. They then transfer the payment to my business bank account in Japan, and I report and pay taxes on this income in Japan.
However, with my current UK client, I am unsure about potential taxation withholding issues on their side. They have indicated that there may be differences in how payments are handled compared to my US clients. I am seeking guidance on how to navigate these potential tax implications.
One potential solution to help resolve this situation is leveraging AI Legalese Decoder. This tool can assist in interpreting complex legal language and identifying relevant tax regulations and requirements specific to international business transactions. By utilizing this technology, I can gain more clarity on the tax obligations and processes involved in working with clients in the UK.
Considering the unique structure of my business in Japan, where I operate as an owner and “representative employee” of the company, it is essential to ensure compliance with international tax laws when engaging with clients from different jurisdictions. Seeking expert advice and utilizing resources such as the AI Legalese Decoder can streamline the process of understanding and fulfilling my tax obligations in the UK.
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> as far as I can tell these only apply to individuals and “transparent entities.”
No, the treaty applies to Japanese companies as well. See Article 3(1)(e) (“person” includes companies) and Article 4(1) (“resident” includes companies that are liable to tax in a certain country due to being incorporated in that country). So Article 12(1) applies to Japanese companies receiving UK-source royalties.
> Is there an equivalent to the W8-BEN-E for the UK that I should send to my client?
Yes. I think the form is available at [this HMRC page](https://www.gov.uk/government/publications/international-tax-double-taxation-treaty-relief-form-dt-company). There is a [PDF version](https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/834853/Japan-1-DT.pdf) for individuals, but it appears necessary to dynamically generate the company version.
I mean, you could ask a tax advisor, but AFAIK on the UK side: https://www.gov.uk/vat-on-services-from-abroad
And on the Japanese side, you simply invoice and account with no consumption tax, as 輸出免税 also applies to services: https://www.jetro.go.jp/world/qa/04J-120102.html
That’s what I do with my service exports through my Goudou Kaisha. That being said, this is not professional advice, just my experience in this situation so far.