I have a question about withhodling tax of branch. If a branch needs to pay royalty and interst to the headquater, would it be imposed the withholding tax by the country which the branch located? Is the rule applies to every country or it will depend on the country where the branch located? Thanks for your help!
This is dependent on which countries are involved and what tax treaty exists between the countries. For example we have looked into the case of a Japanese company making payments for software to a US company and withholding is not required because of the tax treaty between Japan and the US.
I wish I could say these rules are simple and that it's easy to get answers. To determine the Japan-US case I had to talk to 3 different accountants.
The best thing to do is to find a good tax account in the country where you're making the payment from to help you understand the specific inclusions/exclusions to the withholding taxes for your specific type of product.