US Dividend Tax for Japanese Investors

US dividend tax for Japanese investors arrives in two layers, set by two tax authorities that do not talk to each other. The United States withholds at source: 10% under the US-Japan income tax treaty rather than the 30% statutory rate, and only when a valid Form W-8BEN sits with your broker. Japan then taxes the same dividend at 20.315%, and the 外国税額控除 (foreign tax credit) is the mechanism that stops the two from stacking in full.

How much US tax is withheld on US dividends for Japanese residents?

The default rate on US-source dividends paid to a non-resident is 30%. The IRS states it plainly: most types of US source income received by a foreign person are subject to US tax of 30%. Article 10 of the US-Japan income tax treaty caps that at 10% for an ordinary portfolio holding, meaning a holder owning less than 10% of the payer's voting stock. The 5% and 0% rates in the same article attach to large corporate holdings, so an individual investor sits at the 10% line.

That 20 point gap is not abstract. The panel takes the most recent declared per-share dividend for eight household US payers and shows what each rate removes from one payment.

SELECT
    ticker,
    round(argMax(toFloat64(cash_amount), ex_dividend_date), 4)        AS gross_usd,
    round(argMax(toFloat64(cash_amount), ex_dividend_date) * 0.10, 4) AS treaty_10_usd,
    round(argMax(toFloat64(cash_amount), ex_dividend_date) * 0.30, 4) AS statutory_30_usd,
    formatDateTime(max(ex_dividend_date), '%b %e, %Y')                AS latest_ex_date
FROM global_markets.stocks_dividends
WHERE ticker IN ('AAPL', 'MSFT', 'KO', 'JNJ', 'PG', 'XOM', 'CVX', 'PEP')
  AND ticker NOT IN ('SPCX')
  AND ex_dividend_date >= today() - 400
  AND ex_dividend_date <= today()
GROUP BY ticker
ORDER BY gross_usd DESC

The largest payment in the basket is CVX at $1.78 per share, ex-dividend Aug 19, 2026. The treaty rate removes $0.178 of it. The statutory rate removes $0.534 from the same payment, which the holder did nothing differently to receive. At the other end of the basket, AAPL gives up $0.027 per share at the treaty rate. The 30% default and the treaty network behind it are covered in our guide to dividend withholding tax for non-US investors.

What does Form W-8BEN do, and when does it expire?

Form W-8BEN, officially the Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding and Reporting (Individuals), is the single document the treaty rate rests on. It tells the withholding agent, your broker or the US custodian behind it, that the beneficial owner of the dividend is a Japanese resident claiming treaty benefits. With no valid form on file, the agent withholds 30% and has no discretion about it.

A signed W-8BEN is generally valid through the last day of the third calendar year following signature, so one signed in 2026 lapses on 31 December 2029 unless refreshed. It also stops being valid once a detail on it becomes untrue, a change of residence country being the obvious case. Japanese brokers collect the form at account opening and re-request it on that cycle, which makes the common failure a quiet lapse rather than a missing form.

The treaty rate does not turn on how long the stock has been held. Holding-period rules shape the US-resident treatment of the same payment, through the qualified dividend holding period, and none of it reaches a non-resident taxed by withholding at source.

Apple has paid every quarter across the window below, and the last two columns restate each payment net of the treaty rate and net of the statutory rate.

SELECT
    toString(ex_dividend_date)                    AS ex_date,
    formatDateTime(ex_dividend_date, '%b %e, %Y') AS ex_date_label,
    round(toFloat64(max(cash_amount)), 4)         AS gross_usd,
    round(toFloat64(max(cash_amount)) * 0.90, 4)  AS net_after_treaty_usd,
    round(toFloat64(max(cash_amount)) * 0.70, 4)  AS net_without_w8ben_usd
FROM global_markets.stocks_dividends
WHERE ticker = 'AAPL'
  AND ex_dividend_date >= '2023-01-01'
  AND ex_dividend_date <= today()
GROUP BY ex_dividend_date
ORDER BY ex_dividend_date

Apple's per-share dividend moved from $0.23 on Feb 10, 2023 to $0.27 on Aug 10, 2026, across 15 payments. The most recent one reaches a documented Japanese holder as $0.243 per share and an undocumented one as $0.189. The full declaration record sits in our AAPL dividend breakdown.

The Japanese layer: 20.315% on what is left

Japan taxes dividends from listed shares at 20.315%. The National Tax Agency publishes the split: 15.315% of income tax, which is the 15% rate plus the 復興特別所得税 (reconstruction special income tax) riding on it, and 5% local inhabitant tax (住民税).

Order of operations matters for a foreign dividend. The US withholds first, and the Japanese broker applies 20.315% to the amount that lands rather than to the gross. Take a hypothetical 100 yen dividend: 10 yen to the US at the treaty rate, then 20.315% of the remaining 90 yen, 18.28 yen, to Japan. That leaves 71.72 yen credited to the account, a combined drag near 28.3% ahead of any relief.

外国税額控除: the foreign tax credit, and what 特定口座 changes

The 外国税額控除 (foreign tax credit) lets a Japanese resident subtract foreign income tax already paid from Japanese income tax owed. The NTA caps it: the income tax credit limit equals that year's income tax multiplied by adjusted foreign income divided by total income. Four points follow for a retail holder.

• The credit is not automatic. It takes a 確定申告 (final tax return) with the 外国税額控除に関する明細書 (statement concerning the foreign tax credit) attached.
• The ceiling is computed across the whole return rather than per dividend, so a holder whose foreign income is a thin slice of total income can recover only part of the 10%.
• Foreign tax above the treaty limit rate is not creditable in Japan. Someone withheld at 30% for want of a W-8BEN cannot credit the extra 20 points anywhere.
• 特定口座 with 源泉徴収あり (a designated account with withholding at source) settles and reports the Japanese 20.315% for you, and many holders in one never file a return. The credit still comes only through a filed one.

A 一般口座 (general account) leaves both halves to the holder, the Japanese tax computation and the credit claim. Either way, a dividend arriving on lent-out shares can be labelled a payment in lieu of a dividend, and our note on substitute payments and Form 1099 covers how those are reported.

The NISA trap: tax free in Japan, still 10% to the US

NISA, the tax-exempt investment account, is where account type stops being an administrative detail. NISA removes the Japanese tax on dividends and gains inside it. It cannot reach the US withholding, since no Japanese exemption binds a foreign tax authority. And with no Japanese tax charged on that dividend, there is nothing for the US 10% to be credited against. The 外国税額控除 is unavailable on NISA holdings, which leaves the US withholding a dead loss rather than a timing difference.

The panel prices that on Apple's most recent dividend, converted at an illustrative 150 yen per dollar. That rate is an assumption fixed in the SQL for the arithmetic, not a market quote.

WITH
    150.0 AS jpy_per_usd,
    (
        SELECT argMax(toFloat64(cash_amount), ex_dividend_date)
        FROM global_markets.stocks_dividends
        WHERE ticker = 'AAPL'
          AND ex_dividend_date >= today() - 200
          AND ex_dividend_date <= today()
    ) AS div_usd
SELECT
    tupleElement(scenario, 1)                                                                     AS label,
    round(div_usd * jpy_per_usd, 2)                                                               AS gross_yen,
    round(div_usd * jpy_per_usd * tupleElement(scenario, 2), 2)                                   AS us_withheld_yen,
    round(div_usd * jpy_per_usd * (1 - tupleElement(scenario, 2)) * tupleElement(scenario, 3), 2) AS japan_tax_yen,
    round(div_usd * jpy_per_usd * tupleElement(scenario, 4), 2)                                   AS credit_yen,
    round(div_usd * jpy_per_usd * (1 - tupleElement(scenario, 2)) * (1 - tupleElement(scenario, 3))
          + div_usd * jpy_per_usd * tupleElement(scenario, 4), 2)                                 AS kept_yen
FROM
(
    SELECT arrayJoin([
        ('Taxable (tokutei koza), W-8BEN', 0.10, 0.20315, 0.10),
        ('NISA, W-8BEN',                   0.10, 0.0,     0.0),
        ('Taxable, no W-8BEN',             0.30, 0.20315, 0.10),
        ('NISA, no W-8BEN',                0.30, 0.0,     0.0)
    ]) AS scenario
)
ORDER BY us_withheld_yen ASC, kept_yen ASC

Per share, the gross payment is ¥40.5 at the assumed rate. In a 特定口座 with a W-8BEN on file, ¥4.05 goes to the US and ¥7.4 to Japan, with ¥4.05 recoverable through the credit if the ceiling allows the full amount, for ¥33.1 kept. Inside NISA the Japanese ¥7.4 never applies and ¥36.45 is kept, while the ¥4.05 withheld in the US has no offset anywhere in the chain. On 100 shares that dead loss is a hundred times the per-share figure, and a year of quarterly payments four times again.

The fourth row is the worst of the four: NISA with no W-8BEN, where ¥12.15 per share leaves at the 30% statutory rate with no Japanese tax and no credit behind it.

What does the withholding cost in yield terms?

Stated as a yield, the withholding is a thin annual slice that keeps repeating. The panel restates each basket member's trailing twelve-month dividend yield three ways: gross, net of the 10% treaty rate, and net of the 30% statutory rate.

SELECT
    d.ticker                                        AS ticker,
    round(d.ttm_usd / p.last_close * 100, 2)        AS gross_yield_pct,
    round(d.ttm_usd * 0.90 / p.last_close * 100, 2) AS after_treaty_yield_pct,
    round(d.ttm_usd * 0.70 / p.last_close * 100, 2) AS no_w8ben_yield_pct
FROM
(
    SELECT
        ticker,
        sum(cash_amount) AS ttm_usd
    FROM
    (
        SELECT
            ticker,
            ex_dividend_date,
            max(toFloat64(cash_amount)) AS cash_amount
        FROM global_markets.stocks_dividends
        WHERE ticker IN ('AAPL', 'MSFT', 'KO', 'JNJ', 'PG', 'XOM', 'CVX', 'PEP')
          AND ticker NOT IN ('SPCX')
          AND ex_dividend_date > today() - 365
          AND ex_dividend_date <= today()
        GROUP BY ticker, ex_dividend_date
    )
    GROUP BY ticker
) AS d
INNER JOIN
(
    SELECT
        ticker,
        argMax(toFloat64(close), date) AS last_close
    FROM global_markets.stocks_daily_aggs
    WHERE ticker IN ('AAPL', 'MSFT', 'KO', 'JNJ', 'PG', 'XOM', 'CVX', 'PEP')
      AND date >= today() - 15
    GROUP BY ticker
) AS p ON d.ticker = p.ticker
ORDER BY gross_yield_pct DESC

PEP carries the highest trailing yield in the basket at 4.61%, which reaches a documented Japanese holder as 4.15% and an undocumented one as 3.23%. In a 特定口座 the 外国税額控除 can return most of the first gap at filing time. Inside NISA that gap is permanent, every quarter, for as long as the position is held.

FAQ

How much US tax is withheld on US dividends for a Japanese resident?

10% when a valid Form W-8BEN is on file with the broker, under Article 10 of the US-Japan income tax treaty. With no current form, the withholding agent applies the 30% statutory rate for non-residents.

Does Japan tax a US dividend that the US already taxed?

Yes. Dividends from listed shares are taxed in Japan at 20.315%, applied to the amount remaining after US withholding. The 外国税額控除 (foreign tax credit) is how a resident recovers some or all of the US tax, claimed on a 確定申告.

Can I claim the foreign tax credit on dividends held in NISA?

No. The credit works against Japanese tax on the same income, and NISA charges none, leaving nothing to offset. The US 10% withheld on a NISA dividend stays withheld.

Does a 特定口座 handle the foreign tax credit automatically?

No. A 特定口座 with 源泉徴収あり settles and reports the Japanese 20.315% without a return. The foreign tax credit is claimed only by filing one, with the 外国税額控除に関する明細書 attached.

What happens if my W-8BEN expires?

Withholding reverts to 30% on dividends paid after it lapses. The form is generally valid through the last day of the third calendar year following signature, and brokers normally prompt for a replacement ahead of that date.

Every panel here carries the exact SQL beneath it. To run the same per-share withholding arithmetic on a payer you follow, ask the question in plain English on the Strasmore terminal.