Seventh Sense Group

Akasaka 2-12-10

Tokyo, 107-0052

Monday to Friday

9:00 ~ 18:00

Company’s Blue Tax Filer Status (Withdrawal)

Want to know more about the Japanese tax regulations for your business? Check out our video and get in touch with us at Seventh Sense Group!

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.

Differences between white and blue tax return

White Tax Return:

  • No submission for application to tax offices
  • Can use simple accounting method such as single-entry bookkeeping

Blue tax return:

  • Submission of application for approval to tax office
  • Preparation of financial statements

Benefits of filing a blue tax return

  • Carry forward net losses to several subsequent years
  • Carry back net loss to previous year and receive tax refund
  • Special depreciation privilege (applicable to assets that meet the conditions)

Filing white tax returns is default so there are no tax benefits.

Filing a blue tax return is a little more complicated and time-consuming because the filer must prepare financial statements and the accounting method must be double-entry bookkeeping. However, the preparation of accounts will make your finances more organised, not to mention that the FS can be used for other purposes.

Cancellation of Blue Tax Return

However, the tax office can revoke the approval of filing blue tax returns. There are are certain conditions, such as filing late for 2 or more consecutive times.

After cancellation, the company will not be able to use the above-mentioned benefits and will not be able to apply for approval to file a blue tax return until the following fiscal year.

If you are not a blue tax filer, here is the link to the application form for approval to file a blue tax return!

If you are sole-proprietor, here is the some information about Individual Blue Tax return!

For more information, please feel free to contact us at Seventh Sense Group!

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