Is Interest Paid by the IRS Taxable in Japan?

Background: The IRS pays generous interest when they deliver a tax refund late. In the US, this interest is taxable at marginal rates for the tax year in which the refund + interest was paid.

As far as I can tell, there is no explicit mention of IRS interest as a special case in the US-Japan tax treaty, so one might suppose that it is treated like other (non-bond, non-domestic-bank-account) interest and taxed at marginal rates (総合課税) for Japan Tax Permanent Residents (who then need to apply foreign tax credits, re-source income, etc. to avoid double taxation).

However, the language at [https://www.nta.go.jp/taxes/shiraberu/taxanswer/shotoku/1310.htm#a-3](https://www.nta.go.jp/taxes/shiraberu/taxanswer/shotoku/1310.htm#a-3) under 非課税とされる利子 provides a non-exhaustive list of special cases where interest is not taxed, including 納税準備預金の利子 which is (very) loosely analogous to IRS interest paid as part of a refund.

Curious if anyone has a definitive answer here!

by Masudian

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