Japanese Business Glossary

寄付金控除 (Kifukin Kojo), donation tax deduction, refers to tax deductions available in Japan for certain types of donations. These deductions can be categorized into income deductions (所得控除) and tax credits (税額控除).

Income deductions apply to donations made to the government, local municipalities, or designated public organizations. The deduction amount is calculated as follows: the total donation amount for the year minus 2,000 yen equals the income deduction amount. For example, if you donate 30,000 yen in a year, the income deduction amount would be 28,000 yen (30,000 - 2,000)​​.

Tax credits are available for donations to specific organizations such as political parties, certified NPOs, and public interest corporations. The calculation methods vary by the type of recipient organization. For political parties, the tax credit is 30% of the total donation amount minus 2,000 yen. For certified NPOs and public interest corporations, the tax credit is 40% of the total donation amount minus 2,000 yen.

To claim these deductions, you need to file a tax return (確定申告) and provide the necessary documentation, such as donation receipts. Note that donations made through the Furusato Nozei (hometown tax payment) program may have slightly different calculation methods and are subject to specific rules and limitations​.

事業所得 (jigyo shotoku), business income, refers to the income earned from running a business or being self-employed. This type of income includes profits generated from business operations, sales, and services provided by individuals or business entities.

Business income is distinct from other types of income, such as salary (給与所得 = kyūyo shotoku) or investment income (譲渡所得 = joto shotoku).

In Japan, business income is subject to various taxes, including income tax and consumption tax. Business owners must keep detailed records of their income and expenses to calculate their taxable income accurately. They may also be eligible for certain deductions and credits to reduce their tax liability.

不課税 (fukazei) refers to non-taxable items or activities in Japan. In the context of Japanese taxation, certain goods, services, or transactions are exempt from consumption tax, which is similar to VAT or sales tax.

Non-taxable items and activities typically include renting residential property, where residential lease payments are generally not subject to consumption tax. Many medical treatments and services provided by doctors and medical institutions are also exempt from consumption tax. Additionally, tuition fees for formal education provided by schools are non-taxable. Services related to welfare and caregiving, provided by recognized welfare organizations, are often exempt as well.

Understanding what qualifies as non-taxable is important for businesses and individuals to ensure accurate tax filings and compliance with Japanese tax laws.

給与所得者の扶養控除等(異動)申告書 (kyūyo shotokusha no fuyo kojo-to (ido) shinkokusho) is a form notifying of a change in dependent deductions for an employment income earner and is used for tax purposes in Japan. This form is used by employees to declare their dependents and claim related tax deductions. It allows employees to claim deductions for dependents, which can reduce their taxable income and thus their tax burden. It is crucial for determining the correct amount of income tax to be withheld from the employee's salary.

Employees must provide information about themselves and their dependents, including names, addresses, and relationship details. Changes in the number of dependents or their status should be reported using this form. Employees typically submit this form to their employer, who uses it to calculate the appropriate withholding tax amount. The form should be submitted when there is a change in the number of dependents or at the beginning of a new fiscal year.

Proper submission ensures that employees benefit from applicable tax deductions, avoiding overpayment of taxes and ensuring compliance with tax regulations. For more detailed guidance on filling out this form, you can refer to the resources provided by your employer or consult tax professionals.

一時所得 (ichiji shotoku) refers to "occasional income" or "one-time income" in Japan. This type of income includes earnings that are not part of regular income from employment, business, or investments. Typical examples of occasional income are lottery winnings, prizes from contests or sweepstakes, insurance payouts that are not part of regular life insurance benefits, and non-recurring gifts or awards.

Occasional income is generally subject to a different tax treatment compared to regular income. In Japan, this type of income is calculated by taking the gross income from these sources, subtracting any necessary expenses related to earning that income, and then subtracting a deductible amount. The remaining amount is then subject to income tax, but only half of this amount is added to the taxpayer's total taxable income for the year.

It's important to note that this category is specifically for income that is sporadic and not related to regular work or business activities.

国税庁 (kokuzeicho) is the National Tax Agency of Japan. It is the government agency responsible for administering and enforcing tax laws in Japan. Here are the main aspects of the National Tax Agency:

The National Tax Agency oversees the collection of various national taxes, including income tax, corporate tax, inheritance tax, gift tax, and consumption tax. It ensures compliance with tax laws and regulations through audits and investigations. The agency provides taxpayer services, such as tax return processing, guidance on tax matters, and dispute resolution. It also publishes official data and information related to taxation, including the annual publication of land values (rosenka).

The National Tax Agency plays a crucial role in Japan's tax system, ensuring the efficient and fair collection of taxes to support public services and government operations.