Tokyo
Consulting Group Can Help Your Company with Filing Tax Returns in Japan
When setting up business abroad, it is crucial to be
aware of how tax laws vary for each country. Japanese labor and tax laws are
quite cumbersome, and their level of complexity is even greater for foreign
companies. Mistakes are costly, and filing an incorrect tax return in Japan can
dramatically increase tax return amounts, and lead to fines and penalties.
For foreign businesses in Japan, there are numerous
tax returns to file, and figuring which returns are to be filed - and how - can
be a great burden. At Tokyo Consulting Group, our experienced staff can provide
simple and comprehensive solutions for tax preparation and reports of income
tax in Japan. In addition to our Certified Public Tax Accountants, we have
social insurance and labor consultant specialists who are dedicated to
providing high quality Japanese tax services, including tax return preparation
and filing. The services provided by our tax department cover the following
fields:
·
Corporate Tax
Return
·
Individual Tax
Return
·
Consumption tax
Return
·
Withholding Tax
Return
·
Transfer price
taxation
·
Arranging payment
of local taxes
Japan's Tax
Regulations
In Japan, there are four main types of tax that result
from corporate activity: corporate tax (national), corporate inhabitant tax
(local), enterprise tax (local), and special local corporate tax (local). Specific
legal provisions determine the scope of the income from which each of these
taxes is calculated. Thus, it is crucial for a company in Japan to know
precisely what its status and net corporate income is so that their tax may be
calculated according to the appropriate bracket. For instance, the following
brackets are used to set the tax rate of all corporate income taxes: taxable
income below 4 million JPY, taxable income between 4 and 8 million JPY, and
taxable income above 8 million JPY.
For companies with a paid-in capital higher than 100
million yen, the corporate inhabitant tax per capita levy varies according to
the number of employees of the business (more or less than 50). The combination
of employee count and capital amount is then used to assess the amount that
must be paid by the corporation.
All businesses operating in Japan are subject to these
regulations, and are required to file the appropriate tax returns.
Tax filing
Deadlines and extensions
According to Japanese regulations, corporations must
file a final tax return in Japan on their income - and pay the appropriate
amount - for corporate tax, corporate inhabitant tax, and enterprise tax within
two months from the day following the last day of each taxable year (as set by
the corporation). Extensions for filing may be granted under certain
circumstances, but no extensions are granted for the payment.
Tax Payment
The payment must be done through a local Japanese
bank, using vouchers provided by the Japanese government. Thus, it is necessary
for the payment to be made locally, either by in-house local accountants, or by
Japanese accredited tax representatives such as Tokyo Consulting Group.
Tax return filing
Regular tax returns are filed on the white form. The
other possible type of filing is done on a blue form, which implies a variety
of tax benefits. To be allowed to file a blue form, however, corporations must
submit applications no later than the day prior to the starting day of the
taxable year. Foreign entities may enjoy many tax benefits, provided they are
acquainted with the rules and mandatory processes, and file the appropriate tax
return in Japan.
Tokyo
Consulting Group Support
For a foreign entity, the situation is quite complex,
as the incorporation aspect must be taken into account, and legal statuses and
capital amounts must be clearly and transparently established.
Hence, it is crucial for a company or branch in Japan
to know exactly which category it falls under, with regards to employee count,
capital, and income. Failure to accurately measure and report such figures may
result in overpaid tax, or in worse cases, financial penalties for underpaid
taxes. On the other hand, foreign corporations with the appropriate knowledge,
whether in-house or outsourced, can enjoy the various benefits and potential
savings that can result from working with Japanese tax services.
As part of its support strategy, Tokyo Consulting
Group has a dedicated overseas clients department, and long-lasting experience
in helping foreign companies file tax returns in Japan.
Tokyo Consulting Group can fully consult, advise, and
implement permanent solutions to support foreign companies. We can help foreign
business avoid financial difficulties, and allow them to enjoy potential
benefits and savings. Contact us today to learn about Tokyo Consulting Group's
Japanese tax services.
