Purchase tax credits (Invoice System)

If you have a business in Japan, you are probably aware of the Japanese consumption tax. From 2024, Japan has introduced the Invoice System and to encourage business owners to register for the System, there are several special measures related to consumption tax. One of them is the special measure of 80% deduction and this […]

Company Formation from Sole-proprietorship (法人成り)

Normally, starting a new company means starting from scratch. However, if you already have a business as a sole-proprietor, you can transfer your assets (cash, money in bank, receivables, etc.) and liabilities (payables) to your new company. It is called Hōjin nari/法人成り in Japanese. The procedure for establishing a company from sole-proprietor is not really […]

Income wall for dependents (Social Insurance)

The term ‘dependent’ is used for both tax and social insurance purposes, and there are different income thresholds for tax dependents and social insurance dependents. Today we will introduce the income wall for social insurance dependents. In Japan, everyone, regardless of nationality, is required to enroll in [ National Health Insurance and National Pension Insurance] […]

Interim Tax (Japanese taxes)

Interim tax In Japan, individuals who are required to file a tax return must do so by March 15th each year. When they file, if their tax prepayment calculation base is 150,000 yen or more, they must pay the tax in an amount equal to one third of the tax prepayment calculation base. This is […]

Company’s Blue Tax Filer Status (Withdrawal)

Companies can file a white tax return or a blue tax return in Japan. A white tax return is the default option for any company to file a corporate tax return. However, to file a blue tax return, companies must submit an application for approval of filing a blue tax return to the tax offices. […]

Branch Office in Japan

Last time we talked about opening a representative office in Japan. This time, let’s talk about the branch office. It is called “支店” (shiten) in Japanese. Similar to the representative office, you need to appoint a representative and then secure the office. From a head office (foreign company), you will need to prepare an affidavit […]

Gift Tax in Japan

Gift tax is triggered when you receive assets worth more than 1,100,000 yen from individuals. The threshold includes the total amount of all gifts you received in a year, so even if each gift is worth less than 1.1 million yen, if the total amount exceeds the threshold, you must file a gift tax return. […]

Representative Office in Japan

One of the ways to expand your business in Japan is to set up a representative office (駐在員事務所). Compared to setting up a company, there is no registration certificate or notification of establishment to the tax offices (but if a salary is paid to the representative, the withholding tax notification must be filed). To do […]

Director’s enrollment in insurance

Japan’s labor insurance system includes workers’ accident compensation insurance and unemployment insurance. Employers are obligated to enroll all workers, including part-time employees, to workers’ compensation insurance. With regard to unemployment insurance, among the workers covered by workers’ compensation insurance, those who work at least 20 hours per week and are expected to be employed for […]

Company Formation Documents (part 2)

Last week we introduced the Articles of Incorporation. Another important document that you will need when you start a company is a Seal Registration Certificate. If you live in Japan and are a resident of Japan, you probably already have your own seal. If not, you will need to acquire and register it with your […]