Key Facts
• Tokyo District Court ruled in July 2025 that a securities firm’s tax calculation was incorrect.
• The plaintiff, a customer of Iwai Cosmo Securities, was overcharged approximately ¥15,300.
• The case involved U.S. telecom giant AT&T’s corporate split in April 2022.
• The plaintiff received shares of a newly established company valued at ¥78,000.
• Iwai Cosmo Securities withheld ¥15,900 in taxes, applying a 20% rate.
• The plaintiff argued the correct tax amount was ¥565, demanding a refund of the difference.
• The court found the withholding method “not lawful” and ordered a refund.
• Iwai Cosmo Securities stated it had used this method for decades without tax authority objections.
• Both parties chose not to appeal, making the ruling final.
• Experts suggest this case may represent a broader issue of miscalculated tax withholdings.
Summary
A Tokyo District Court ruling in July 2025 found Iwai Cosmo Securities’ tax withholding practices on foreign stock transactions to be excessive. The case centered on a customer who was overcharged approximately ¥15,300 in taxes following AT&T’s corporate split in 2022. The court determined the firm’s calculation method, which had been used for decades, was not lawful and ordered a refund. The plaintiff had argued the correct tax amount was ¥565, significantly lower than the ¥15,900 withheld. Both parties accepted the ruling, which is now final. Experts warn this may indicate a larger issue of tax miscalculations in the industry.
