Takashi Yamaguchi, English Speaking Japanese Tax Accountant
Tel/Fax : 03-6312-3320
営業時間 : 9:00 - 18:00 (月~金)

Income Tax Return Filing in Japan

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I am willing to take care of your tax return filing in Japan.
Here are summary of tax filing requirement for personal and corporate income taxes.
 

Company worker

A company worker in Japan usually does not have to file income tax return because its employer withholds income tax from monthly salary and bonus. The employer will make adjustment for the withholding tax on December or next January payroll so that the aggregated amount of the withholding tax becomes the same to annual tax due amount for each employee.
Such adjustment made by the employer is called “Year-end tax adjustment” or “Nenmatsu-chousei (年末調整) in Japanese.

However, in the following cases, you must file annual income tax return by yourself by March 15th of the following year:

  • Your gross salary for the year exceeded 20 million yen,
  • You earned business income or capital gain,
  • You have salaries paid by different employers and total amount of such salaries exceeded 200,000 yen for the year,

Besides, as for the following cases, it might be better to file annual income tax return to claim tax deduction and/or tax refund:

  • The employer did not make YETA,
  • Married, became a parent after YETA,
  • Made donation payment to public, charitable, or political organizations,
  • Owe housing debt,
  • Incurred capital loss,

The annual income tax return should be filed from February 16th to March 15th of the following year.
However, when you file the tax return to claim tax refund, you may file it anytime within 5 years from January 1st of the following year to respective tax year.
You must fill out necessary sections on the tax return form then deliver it to the tax office near by your home address.
Some tax credit, deductions and allowances required evidence, such as withholding tax statement (prepared by the employer, etc.), payment certificate of life insurance premium, and receipts of medical expenses.

You may deliver the tax return form and the evidences to the tax office by either bringing in, postal mail, or electronic filing (e-Tax).
The e-Tax requires advance registration with the tax authority.
However, you are exempt from the registration when a registered tax accountant files your tax return via e-tax upon your request.

Self-employed (Freelancer, Sole proprietor)

You must file the annual income tax return when your entire income amount for the year exceeds 200,000 yen.
For tax return purpose, you need to keep books and records through the year then calculate business income once a year.
If you are qualified for “Blue Tax Return Filing”, you are entitled to claim special tax allowance, either 100,000 yen or 650,000 yen, from business income.
To obtain the BTRF status, you must file application to the tax office in advance.
When you apply to keep proper books in accordance with double entry bookkeeping system, the tax allowance of 650,000 yen is granted. Simple bookkeeping is entitled to the 100,000 yen allowance.

The annual income tax return should be filed from February 16th to March 15th of the following year.
You must fill out necessary sections on the tax return schedules, including calculation of business income, then deliver it to the tax office near by your home address.
Some tax credit, deductions and allowances required evidence, such as withholding tax statement (for certain type of income such as consideration for interpreter, translator, professional athlete, actor/actress, etc.).
You do not have to submit receipts and invoices to the tax office together with the tax return.
However, you must keep them for 7 years for the case of tax audit.

You may deliver the tax return form and the evidences to the tax office by either bringing in, postal mail, or electronic filing (e-Tax).
The e-Tax requires advance registration with the tax authority.
However, you are exempt from the registration when a registered tax accountant files your tax return via e-tax upon your request.

Corporation

The “corporation” for tax purpose includes a non-incorporated association, a non-incorporated foundation as well as a legal entity established in accordance with relevant law such as a company, a general incorporated association, a general incorporated foundation.
Non-incorporated association and foundation are deemed as “corporation” for tax purposes then required to file tax returns for each fiscal year as same to a company if they are engaged in “continuous” “profit-making business”.

The corporation must keep proper books and records then prepare financial statements in accordance with Generally Accepted Accounting Principle (so called GAAP).

Income of corporation, calculated based on profit stated in the financial statements, is subject to corporation tax (national tax), local corporation tax (national tax), corporate inhabitant tax (local tax), corporate enterprise tax (local tax) and local corporation special tax (national tax).

These taxes are imposed fiscal year basis and the tax return filing due date is within 2 month from ending date of each fiscal year.
The filing due date is extendable upon request from a taxpayer and approval by the the tax authority.
The corporate tax returns should be filed to the following tax authorities:

Type of tax return To be filed to
Corporation tax & local corporation tax National tax office having jurisdiction over address of the head office of a corporation
Prefecture corporate inhabitant tax, enterprise tax, local corporation special tax Prefecture tax offices having jurisdiction over address of each office of a corporation
Municipal corporate inhabitant tax Mayors of municipal where each office of a corporation located

You may deliver the tax return schedules and financial statements to the tax office by either bringing in, postal mail, or electronic filing (e-Tax).
The e-Tax requires advance registration with the tax authority.
However, you are exempt from the registration when a registered tax accountant files your tax return via e-tax upon your request.

From the fiscal year beginning on or after April 1, 2020, corporate tax and consumption tax return filing of “large corporation” will be accepted by only electronic filing (e-Tax).

The large corporation means a corporation with paid-in capital of more than 100 million yen at the beginning of the fiscal year.
Mutual Companies (Sougo Kaisha), Investment Corporations (Toushi Houjin) and Special Purpose Companies (Tokutei-mokuteki Kaisha) shall file the tax return by the e-Tax regardless of the capital amount.

 

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