Japanese Business Glossary

基礎控除申告書 (kiso kojo shinkokusho), basic deduction declaration form, refers to a document used in Japan for claiming the basic deduction when calculating personal income tax. This form is essential for employees and individuals who want to apply for the basic deduction, which reduces their taxable income.

The basic deduction is a standard amount that every taxpayer is entitled to deduct from their income. The purpose of this deduction is to lower the tax burden on individuals, ensuring that a portion of their income is not subject to tax.

Filing this form typically involves providing personal details, income information, and any other relevant financial data. This information is then used by the tax authorities to determine the correct amount of basic deduction and, consequently, the amount of income tax owed.

If you are an employee, your employer usually provides this form, and it should be submitted as part of your year-end tax adjustment (年末調整, nenmatsu chosei). For those who file their taxes independently, the form is submitted along with their tax return documents.

税理士法人 (zeirishi hojin) refers to a tax accountant corporation in Japan. This type of corporation is formed by certified tax accountants (税理士 = zeirishi) who are licensed to provide tax-related services. These services typically include preparing and filing tax returns, providing tax advice and planning, representing clients in tax audits and disputes with tax authorities, offering bookkeeping and accounting services, and assisting with corporate tax strategies and compliance.

Tax accounting corporations allows tax accountants to pool their resources and expertise, offering a wider range of services and serving more clients effectively. These corporations are regulated under Japanese law to ensure they maintain professional standards and ethical practices.

登録免許税 (toroku menkyo zei) is a registration and license tax in Japan. This tax is levied on the registration of certain legal documents and transactions. It is commonly encountered during the incorporation of companies, transfer of real estate, and other legal registrations that require official acknowledgment by the government.

The tax rate and amount depend on the type of registration and the value of the transaction or asset being registered. For instance, when incorporating a company, the tax is calculated based on the company's capital amount, with a minimum tax amount set by law.

Incorporation registration typically requires the payment of this tax as part of the process. It's important to include this cost when planning to start a business in Japan.

簡易課税 (kanii kazei) refers to the "simplified taxation system" in Japan. This system is designed for small to medium-sized businesses to simplify the calculation and payment of consumption tax (similar to VAT or GST).

Under this system, instead of calculating the consumption tax based on actual sales and purchases, businesses use a simplified method that applies a predetermined percentage to their sales to estimate the tax amount. This can significantly reduce the administrative burden on smaller businesses.

To be eligible for the simplified taxation system, businesses must meet certain criteria, such as having an annual taxable sales amount below a specified threshold. Businesses that qualify can opt to use this simplified method instead of the standard method.

配当控除 (haito kojo) refers to the "dividend deduction" in Japan. This is a tax deduction available to individuals who receive dividends from domestic corporations.

The purpose of the dividend deduction is to alleviate the double taxation of dividend income. Dividends are initially taxed at the corporate level as part of the company's profits. When these dividends are distributed to shareholders, they are taxed again at the individual level. The dividend deduction allows individual taxpayers to reduce their taxable income by a certain percentage of the dividends received, effectively lowering the overall tax burden on dividend income.

The specific deduction rate can vary, and there are certain conditions and limits that apply. This tax benefit is part of Japan's efforts to encourage investment in domestic companies by making dividend income more attractive to investors.

課税事業者 (kazei jigyosha) refers to a "taxable business entity" in Japan. This term is used to describe businesses that are required to pay consumption tax (similar to VAT or GST) on their sales.

A business becomes a taxable business entity if it meets certain criteria, such as exceeding a specific threshold of annual taxable sales. Once a business qualifies as a taxable business entity, it must register with the tax authorities and comply with the obligations of calculating, collecting, and remitting consumption tax on its sales to the government.

This status also allows the business to claim input tax credits for the consumption tax paid on its purchases and expenses, which can help offset the tax owed on sales.