Japanese Business Glossary

地方税 (chihozei) refers to local taxes in Japan. These taxes are levied by municipal and prefectural governments to fund various public services and infrastructure projects within their jurisdictions. Chihozei includes a variety of taxes such as residential tax, property tax, and business tax. Each type of local tax serves different purposes and is calculated based on specific criteria relevant to the taxpayer's circumstances.

Residential tax, for example, is imposed on individuals based on their income and place of residence. Property tax is levied on the ownership of land and buildings, and business tax is charged to companies based on their business activities and profits. The rates and regulations for these taxes can vary significantly between different municipalities and prefectures.

Chihozei is crucial for local governments as it provides the necessary funds to maintain and improve public services such as education, healthcare, transportation, and public safety. Residents and businesses are required to comply with local tax laws, ensuring timely payment to support their communities. Understanding and managing local tax obligations is essential for financial planning and compliance with Japanese tax regulations.

控除対象扶養親族 (kojo taisho fuyo shinzoku) refers to dependent relatives eligible for tax deductions in Japan. These are family members whom a taxpayer supports financially and who meet certain criteria set by the Japanese tax authorities. By claiming these dependents, taxpayers can reduce their taxable income, thereby lowering their overall tax burden.

To qualify as a dependent relative, the dependent must typically reside in the same household as the taxpayer or be financially supported by them. They must also have an annual income below a specified threshold. Common examples include children, elderly parents, and sometimes siblings. Claiming such dependents on a tax return allows for various deductions, which can lead to significant tax savings for the taxpayer.

Maintaining accurate records and documentation is essential for claiming these deductions, as tax authorities may require proof of the dependent's eligibility during tax assessments.

納付書 (nofusho) refers to a payment slip or tax payment form in Japan. This document is used by taxpayers to make various types of tax payments, such as income tax, consumption tax, and social insurance contributions. The nofusho includes important details such as the taxpayer's name, address, tax identification number, the amount due, and the payment deadline.

Taxpayers obtain payment slips from tax authorities, either in person, by mail, or online, depending on the type of tax and the taxpayer's preference. Once completed, the nofusho can be submitted along with the payment at designated financial institutions, such as banks or post offices. Some taxes can also be paid online through electronic payment systems.

青色申告控除 (aoiro shinkoku kojo) refers to the blue return deduction in Japan. This is a tax deduction available to self-employed individuals, sole proprietors, and small business owners who choose to file a blue return, which is a more detailed and thorough tax return compared to the standard white return.

By filing a blue return, taxpayers can take advantage of various deductions and tax credits, ultimately reducing their taxable income. To qualify for the blue return deduction, taxpayers must keep accurate and comprehensive financial records and submit these records along with their tax return. The benefits of filing a blue return include higher deduction amounts and access to other tax incentives.

The blue return system encourages better bookkeeping practices and compliance with tax regulations by rewarding those who maintain detailed financial records.

源泉税 (gensenzei) refers to withholding tax in Japan. This type of tax is deducted at the source of income, meaning that it is withheld from payments such as salaries, dividends, and interest before the recipient receives the funds. Employers or payers are responsible for calculating and withholding this tax from their employees' or payees' earnings and then remitting it to the tax authorities on their behalf. The purpose of 源泉税 is to ensure the timely collection of taxes and reduce the burden of lump-sum tax payments for individuals. The withheld tax can be credited against the individual's final tax liability, and any excess amount withheld may be refunded after filing a tax return. This system helps streamline tax collection and compliance for both taxpayers and the government.

収入金額 (shuunyuu kingaku) refers to the amount of income or revenue in Japan. This term is commonly used in financial statements and tax documents to indicate the total earnings a person or business has received over a specific period. Shuunyuu kingaku can encompass various sources of income, such as salary, business revenue, interest, dividends, and rental income. Accurate reporting of one's income is essential for tax purposes, as it determines the amount of taxable income and the corresponding tax obligations. For businesses, it provides a key indicator of financial performance, helping to assess profitability and inform strategic decisions.