Shirokane CPA Firm

When You Need Incorporation for a Tax Advantage

Start Your Business Simply Most people start their business as sole proprietors and run their business for some years. That is not a bad idea. Rather, that is still a good idea because you could start your business without paying the incorporation taxes and because you could complete your tax return by filing just your individual income tax return. You also could try your business without a large amount of initial investment. However, you need a company for your tax advantage when you get your business growing enough. I will explain here how and where you could get tax advantages in Japan tax practice. Those advantages are to; Make to[…]

Shirokane CPA Firm

Individual Residential Tax in Japan

1. What Is the Individual Residential Tax There would not be a residential tax in the US and the UK. Since the Council tax in the UK imposes a citizen based on the residence, the council tax is similar to Japanese real estate tax translated into fixed asset tax in official documents issued by local governments. Residential tax is sometimes called residence tax and translated into inhabitant tax officially in Japan. Here I use residential tax to explain it. 2. Calculation of the Individual Residential Tax Japanese individual residential tax consists of two components. One is calculated by individual taxable income, and the other one is a fixed amount of[…]

Posted in TAX
Shirokane CPA Firm

Tax Saving for Expats in Japan

This is a general tax saving method in Japan but most Japanese employees could not use this method. This is the difference between expats in Japan and employees in Japanese companies. Japanese employees called Salary-man in Japanese are forbidden to work additionally even in their private time. Taxable incomes for individuals are classified into 10 taxable incomes. Here we talk about 2 of them, business income and Employment income. Business income is an income derived from your business like independent enterprises of commerce, industry, fisheries, agriculture, independent personal services, etc. You have to record your all transaction relating to your business on your accounting book. At the end of a[…]

Posted in TAX
Shirokane CPA Firm

New Documents for Exemption for Dependents on Japan Individual Income Tax

With respect to withholding at source for salary, to be paid on after January 1, 2016 or the year-end tax adjustment, You are required to submit the following documents in order to apply exemption for Abroad Dependents. 1. Applying for a Tax Exemption for Dependents If you have family supporting their life expense, you would be able to deduct some amount from your income on tax calculation. The new rule is for the exemption for dependents living abroad. Under income tax laws and regulations, the new rule has come into force since October 2015. Accordingly you are required to submit or present “Documents concerning relatives” and “Documents concerning remittances” for[…]

Shirokane CPA Firm

Consumption Tax Should be included?

If you are a blue filing taxpayer in Japan, you could deduct your payment to purchase an asset upto JPY 300,000. Now should you include sales tax called as a consumption tax in Japan, to the amount to determine the JPY 300,000 criterion. Or, when you are not a blue filing taxpayer, it is JPY 200,000 to judge deduction or depreciation. 1. First, You decide the accounting method on dealing with a consumption tax. There are two methods, one is to account all prices with a consumption tax included, and the other method is to account all prices without a consumption tax. Most self-employer business persons use the accounting method[…]

Shirokane CPA Firm

On Shorter Stay in Japan, Not Taxed in Japan?

If you sale your products or provide your service in Japan, do you have to pay Japan tax? This depends on your type of taxpayer on Japan Tax Laws. As I briefly write about taxpayer type before, if you are classified to a resident or a non-permanent resident, you have to pay the tax for income generated in Japan. 1. Under What situation Would You Be Taxed in Japan? So, if you sales your products into Japan through internet at your e-shop from US or Europe, or if you have a couple of business in some countries including Japan and provide your service in Japan just during your temporary stay[…]

Shirokane CPA Firm

What kind of taxpayers are you classified as?

Japan Income Tax Act classifies individual taxpayers as following three types. Resident Nonresident Non-permanent Resident 1. Resident Resident is an individual who has a domicile or has had a residence continuously for one year or more in Japan. Residents are composed of both permanent residents and non-permanent residents. 2. Nonresident Nonresident is just defined as an individual who is not a resident. 3. Non-permanent Resident Non-permanent resident is a resident who does not have Japanese nationality and who has had a domicile or a residence in Japan for not more than five years in total within the past ten years. When your taxpayer type is determined, some situations are considered.[…]