Hi, I am about to move to Japan and I pay alimony to my US-resident ex-spouse.
Here is the situation:
1) Me: Resident in Japan, paying JP taxes
and alimony to ex-.
2) Ex-spouse: Resident of US, California
Here is what I found in the US-Japan Tax Treaty:
"3. Periodic payments, made pursuant to a written separation agreement or a decree of divorce, separate maintenance, or compulsory support, including payments for the support of a child, paid by a resident of a Contracting State to a resident of the other Contracting State shall be taxable only in the first-mentioned Contracting State. However, such payments shall not be taxable in either Contracting State if the individual making such payments is not entitled to a deduction
for such payments in computing taxable income
in the first-mentioned Contracting State."
It seems that if Japan does not allow to deduct alimony payments then neither I nor my Ex- will have to pay taxes on the alimony payments?
Is my understanding of the treaty correct?