Japanese ETFs and mutual funds can claim back US witholding taxes now

[RetireJapan]

Really interesting thread here. I wonder if eMaxis Slim funds are doing this?

https://www.reddit.com/r/JapanFinance/c ... nese_etfs/

[EmaxisSlim Cultist]

Really interesting thread here. I wonder if eMaxis Slim funds are doing this?

https://www.reddit.com/r/JapanFinance/c ... nese_etfs/

The considerations are different for Mutual Funds. Our man Shintaro has our backs.

国内から直接全世界に投資するファンドの場合(eMAXIS Slim全世界株式など)、配当に対して各投資国で約10%が源泉徴収されます。尚、国内投資分の配当にはファンド段階では課税されませんので時価総額比全世界株式(国内7%と仮定)だと配当課税は合計9.3%となります。

そして、売却時には(配当分も含めて)譲渡益として国内で課税されます。

一方、VTのように米国を介して全世界に投資する場合、現地国に加え米国での課税が加わります。

VTは約58%を米国に投資しますが、この分は現地国=米国となり三重課税にはなりません。問題となるのは残りの42%。これに対して現地国、米国と課税され、それぞれの税率が10%と仮定すると計19%の税率となります。米国、米国以外を含めてVT全体では約14%が源泉徴収される事になります。

単純には、国内から直接全世界に投資するファンドでは配当源泉徴収税率9.3%、米国ETFを介するファンドでは13.8%、およそ5%の違い、これは配当利回りが2%と仮定すると0.1%の違いとなります。即ち、FOFの場合、この分だけ信託報酬・実質コストが上乗せされるのと等価と考えて良いでしょう。

尚、米国だけに投資する楽天・全米株式インデックス・ファンドでは、このような不利はなく国内から直接投資するファンドと同等です。

In the case of a fund that invests in the world directly from Japan (e.g. eMAXIS Slim Global Equity), about 10% of the dividend is withheld at source in each country of investment. In addition, dividends from domestic investments are not taxed at the fund stage, so the total taxation on dividends will be 9.3% for global stocks (assuming 7% domestic) by market capitalization.

Then, when you sell the shares (including dividends), they are taxed as gains on transfer in Japan.

On the other hand, if you invest worldwide via the U.S. like VT, you will be taxed in the U.S. in addition to the local country.

VT invests about 58% in the U.S., but this portion is taxed in the U.S., which means it is not triple taxed. The problem is the remaining 42%. The remaining 42% is taxed locally and in the U.S. If we assume that each tax rate is 10%, the total tax rate will be 19%. For VT as a whole, including both the U.S. and non-U.S., about 14% will be withheld.

Simply put, the dividend withholding tax rate is 9.3% for funds that invest directly in the world from within Japan and 13.8% for funds that invest via US ETFs, a difference of about 5%. In other words, in the case of FOFs, it is equivalent to adding trust fees and real costs by this amount.

The Rakuten U.S. Equity Index Fund, which invests only in the U.S., has no such disadvantage and is equivalent to funds that invest directly from within Japan.

Translated with www.DeepL.com/Translator (free version)

https://shintaro-money.com/rakuten-vanguard-vt/

[fools_gold]

Really interesting thread here. I wonder if eMaxis Slim funds are doing this?

https://www.reddit.com/r/JapanFinance/c ... nese_etfs/

I don't think so. As far as I can see it only applies to funds that make distributions.

https://www.jsda.or.jp/anshin/oshirase/ ... in_tax.pdf