In this page, especially for a sole proprietor who will start a business in Japan.
For a sole proprietorship
Recently I have received a few inquiry of ,
I would like to file a tax return,
but I do not know the Japanese language and No Japanese_business partner , how to do?
In addition to the above, there are a very few Japanese certified Tax Accountant (English speaker) in my area, ｈow to do?
The Answer:
wherever you lives in Japan, I can assist you by using Electric filing system(E-TAX) , by Electric Data Transfer etc. However, this can help you to solve your problem 80~90%, not 100%.
I need to see you, if possible, sometime at your place or my place for our perfect understanding. This is why our consulting fee and tax filing fee may cause you a little bit higher prices.
Please note this also that I run my office by myself (no staff), so I maybe not able to assist you in your every requests.
Introduction for Japanese Tax
(This following texts are a quote from MIPRO Guide to Starting a business in Japan～startup Q&A～）
１） National txes: Income tax, Special income tax for reconstruction, Consumption tax
Local taxes: Local residence tax, Enterprise tax, Fixed property tax
Income earned by sole proprietorships are classified as business income, and income tax, localresidence tax
( in part), and enterprise tax are levied on profits after subtracting expenses from revenue(income). These
taxes are levied only when a profit is earned, so this means that no taxes are levied if a deficit is incurred, in
principle. For business income , a tax return must be filed by the taxpayer by March15 of the following year.
2)Taxation method
Taxes levied through self-assessment: Income tax, special income tax for reconstruction, Consumption tax ,
Depreciable property tax (Fixed property tax)
Taxes levied through official assessment: Residence tax, Enterprise tax, Fixed property tax (land and buildings)
3)Due date for filing returns
The business term (accounting period) for sole proprietorships is from January 1st to December31st
(calendar year taxation) of the relevant year, and the business term cannot be revised within the year.
＊Income tax Tax returns must be filed by March 15th of the following year.
＊Consumption tax Tax returns must be filed by March 31st of the following year.
４）Consumption tax：
Sole proprietorships do not have an obligation to pay consumption tax in their first business year of
commencing their business.
For the second year for sole proprietorships , a judgement of whether consumption tax is to be paid or
exempted is decided in accordance with their financial standing in their first year of business or their
first term after establishment.
5) Notifications to be submitted when commencing business:
An individual who commences their business needs to submit the following application forms. An explanation
and the due date of submission for each application form is as follows:
A)Tax office:
Income tax ①Notification of commencement or Termination of sole proprietor business: within one month
after the date of commencement of business
②Application form for approval of filing Blue Income Tax Return: In principle, by March15th of
the year for which a sole proprietor wishes to file a blue return.
③Notification of Family Employee’s Salaries of Blue Return Taxpayers: By March 15 of
the year for which a sole proprietor wishes to include family employees' salaries as business
expenses.
Withholding Income Tax: Notification of Establishment
Consumption Tax: Notification of choosing to become a Taxable Payer of Consumption Tax
６）Ｂｅｎｅｆｉｔｓ ｏｆ ｆｉｌｉｎｇ ａ ｂｌｕｅ ｒｅｔｕｒｎ
＊Ｓｐｅｃｉａｌ ｄｅｄｕｃｔｉｏｎ ｆｏｒ ｂｌｕｅ ｒｅｔｕｒｎ ｆｉｌｉｎｇ
＊Ｆａｍｉｌｙ ｅｍｐｌｏｙｅｅｓ’ salaries of blue return taxpayers
*Carry -forward deduction and carry-back refund of net loss
7) Determination of resident and non-resident classification
①Resident: Residents are those who have address in Japan, or who have resided continuously in Japan for
one year or more, and residents are categorized into permanent or non-permanent residency.
Non-permanent resident
Permanent resident
②Ｎｏｎ－ｒｅｓｉｄｅｎｔ：
Ｎｏｎ－ｒｅｓｉｄｅｎｔｓ ａｒｅ ｉｎｄiviｄｕａｌｓ ｎｏｔ ｆaｌｌｉｎｇ ｉｎｔｏ ｔｈｅ ｒｅｓｉｄｅｎｔ ｃａｔｅｇｏｒｙ
８） Ｒａｎｇｅ ｏｆ ｔａｘａｂｌｅ ｉｎｃｏｍｅ ａｃｃｏｒｄｉｎｇ ｔｏ ｒｅｓｉｄｅｎｔ ｓｔａｔｕｓ
①Ｐｅｒｍａｎｅｎｔ ｒｅｓｉｄｅｎｔ： Ａｌｌ ｉｎｃｏｍｅ ｉｓ ｔａｘａｂｌｅ
②Ｎｏｎ－ｐｅｒｍａｎｅｎｔ ｒｅｓｉｄｅｎｔ： Ｔａｘａｂｌｅ ｉｎｃｏｍｅ ｆｏｒ ｎｏｎ－permanent residents is all Japan-source
income and overseas-source income in Japan or remitted from overseas.
③Non-resident: Only Japan-source income is taxed.
Electronic Bookkeeping Law has bee effected since Jan 1st 2024 in Japan.
I wonder you have not yet prepared it , especially those who -sole proprietorship- are doing business Japan coming from outside Japan.
In case you are not ready yet ,that transaction itself may be judged by Tax offices non- existed transaction at worst cases.
To avoid the worst cases, please make sure the following points(A&B).
A:[Ensuring visibility]
① Preparation of monitors, operating instructions, etc.
② Satisfaction of search requirements
First of all, you need to satisfy ① and ②.
However, those with sales of 50 million yen or less two tax years ago, or
"Possible to print out electronic transaction data and organize it by date and supplier.''
"Possible to meet the requests for downloading" electronic transaction data.
If the above are possible to do so, requirement ② is not necessary
B:[Ensuring authenticity]
Establishment of administrative processing regulations to prevent unjustified corrections and deletions,
A sample of the administrative processing regulations is posted on the National Tax Agency website.
Therefore, please refer to it