Newsletter #007　　　　　　　　　　　　　Starting and Running a Business in Japan – Part 3　　Starting as a Sole Proprietor: What Should You Do First?

Helping foreign business owners understand Japan's tax system—one topic at a time.

If you decide to start your business in Japan as a sole proprietor, what should you do first?

There are several tax procedures, but you do not need to learn everything at once.

Here are the main steps.

1. Notify the Tax Office

When you start a business, you should submit a Notification of Opening a Business to the tax office.

For businesses started from 2026, the deadline is generally the filing deadline for your income tax return for that year.

The Blue Return (Aoiro Shinkoku) can provide important tax benefits.

However, you must apply for it within the required period.

If you start your business on or after January 16, the application is generally due within two months from the starting date.

Do not wait until your first tax return to think about this.

From the beginning, keep records of:

Good bookkeeping from Day One makes your first tax return much easier.

Depending on your business, you may also need to consider:

Not every rule applies to every business.

Starting a business is not only about making sales. Tax preparation starts from Day One.

Notify the tax office, consider the Blue Return early, and keep proper accounting records from the beginning.

These simple steps can prevent many tax problems later.

Starting and Running a Business in Japan – Part 4

Next time, we will explain why the Blue Return is important and what benefits it can provide to a sole proprietor.

Prepared by　Kyoji Yasui Tax Accountant Office

Helping foreign business owners understand Japan's tax system with clear, practical guidance.