Japan’s Ministry of Finance has eased restrictions on the conditions surrounding holdings of discount short-term Japanese Government Bonds (TB/FB) as of April 1.
Sovereign, foreign corporations and certain trusts/funds are now able to hold TB/FB through global custodians who are qualified foreign intermediaries (QFI).
The new ruling affects Japanese Treasury bills (TB) which have a maturity of six-months or one year, and financial bills (FB) which are also discounted bonds with a maturity of about 60 days.
In accordance with Article 41 of the Special Taxation Measures Law and the related law, and with the revisions in the government ordinance, ministerial ordinance, and enforcement regulations, the scope of tax-exemption has been expanded.
According to the notification (Notification No 188) of the Ministry of Finance, the holding of TB/FB through QFI has also been permitted. Effectively, TB/FB can now be held through Qualified Foreign Intermediaries (QFI) provided that the beneficial owner is eligible for tax exemption.