Taxation of RSUs granted by a parent company outside Japan (related to service in Japan/non-qualified RSUs for Japanese tax purposes)

RSUs that are vested while the employee is a resident of Japan which are related to work in Japan are subject to aggregate taxation as salary for the year and are taxed together with other employment salary.

The market value of the shares at the time of vesting must be converted to TTM (telegraphic transfer middle market) and added to the salary paid by the Japanese subsidiary for the tax return.

If there are different provisions in the tax treaties between Japan and each country, the provisions stipulated in the tax treaties shall take precedence.