40. Classification and Taxation of Trusts in Japan 信託課税

信託財産に係る課税について英語でまとめました。
An overview of classification of trusts and their taxation is as shown in the table below. 

See this post for more about Japanese tax and accounting.

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Under Japanese Corporate Tax Law, income is taxed, in general, in the hands of not the nominee but the beneficiary. Accordingly, trusts in Japan can be classified into the following three types for tax purposes and profits from trust property are taxed as shown in the table below. 

	Taxpayer	Timing of tax	Examples	Tax treatment	Other
Type 1 (Juekisha tou kazei shintaku)	Beneficiary	When profit accrues to the trust	General trusts	The beneficiary is deemed to own assets and liabilities of, and profits and expenses attributable to, the trust.	General taxation of trusts (i.e., pass-through)
Type 2 (Shuudan toushi shintaku tou)	Beneficiary	When profit is distributed to beneficiary	Trusts for collective investment scheme	The beneficiary is deemed to own assets and liabilities of, and profits and expenses attributable to, the trust.	The trustee must be a corporation
Type 3 (Houjin kazei shintaku)	Trustee	When profit accrues to the trust	Trusts for securitization of real estate or certain other assets	The trustee is taxed on the following separately: A.   Assets and liabilities of, and profits and expenses attributable to, the trust B.   Its other assets and liabilities, and profits and expenses	The trustee, whether corporation or individual, is subject to corporate income tax

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