Japanese Business Glossary

税務署 (zeimusho) is the tax office in Japan. It is a local government agency responsible for administering tax laws and regulations, collecting taxes, and providing tax-related services and information to the public.

Each region in Japan has its own tax office, which handles tax matters for individuals and businesses within its jurisdiction. The duties of a tax office include processing tax returns, conducting audits, and enforcing tax compliance. They also offer guidance and support to taxpayers, helping them understand their tax obligations and assisting with any issues that may arise.

Visiting or contacting the tax office is often necessary for tasks such as filing tax returns, obtaining tax certificates, and addressing specific tax-related inquiries. The tax office plays a crucial role in ensuring the proper functioning of Japan's tax system, contributing to the overall financial stability of the country.

配偶者控除 (haigūsha kojo) is the spousal tax deduction in Japan. This tax benefit allows a taxpayer to reduce their taxable income if they have a spouse who earns below a certain income threshold.

The purpose of the spousal tax deduction is to provide financial relief to households where one spouse is the primary earner and the other has little or no income. To qualify for this deduction, the spouse's annual income must be below a specified amount, which is subject to change by tax regulations. The primary earner can then apply this deduction when filing their annual tax return, effectively lowering their overall tax liability.

The spousal tax deduction helps support families by reducing the tax burden on single-income households, making it easier for them to manage their finances. This deduction is a significant aspect of Japan's tax system, aiming to recognize and support the economic contribution of non-working or low-earning spouses.

源泉所得税 (gensen shotokuzei) is withholding income tax in Japan. This tax is deducted at the source of income, meaning it is withheld by the payer and submitted directly to the tax authorities on behalf of the recipient.

Commonly applied to salaries, wages, bonuses, and other types of compensation, the practice of withholding income tax ensures that taxes are collected promptly and efficiently. Employers are responsible for calculating and withholding the appropriate amount of tax from their employees' earnings before paying them. This system not only streamlines tax collection but also simplifies the tax process for employees, as the tax is automatically taken out of their income.

At the end of the year, individuals may need to file a tax return to reconcile their total tax liability with the amount of tax that has been withheld. This may result in a refund if too much tax was withheld or an additional payment if too little was deducted. The system of withholding income tax is a key component of Japan's tax administration, promoting compliance and easing the burden of tax payments for both taxpayers and the government.

扶養控除申告書 (fuyo kojo shinkokusho) is the Declaration of Dependent Deductions form in Japan. This document is used by employees to declare their dependents in order to qualify for tax deductions related to those dependents.

By submitting this form, employees can reduce their taxable income, thereby lowering the amount of income tax withheld from their salary. Dependents typically include children, elderly parents, or other family members who rely on the taxpayer for financial support.

The form must be submitted to the employer, who will then adjust the employee's tax withholdings accordingly. This form is usually submitted at the beginning of the tax year or when there is a change in the number of dependents. Properly completing and submitting the form ensures that the employee receives the appropriate tax benefits, contributing to more accurate and beneficial tax withholding throughout the year.

免税事業者 (menzei jigyosha) refers to a tax-exempt business or individual in Japan. These entities are exempt from the obligation to collect and remit consumption tax (similar to VAT or sales tax) on their sales.

Typically, small businesses and freelancers with annual taxable sales below a certain threshold qualify as tax-exempt businesses. This threshold is currently set at 10 million yen, meaning businesses or individuals with taxable sales below this amount in a base period (usually the previous fiscal year) are not required to charge consumption tax on their goods or services.

Being a tax-exempt business simplifies tax reporting and reduces administrative burdens, as these businesses do not need to account for consumption tax in their transactions. However, they also cannot claim input tax credits for the consumption tax paid on their purchases.

This status can be advantageous for small businesses and startups by lowering their tax liabilities and easing their entry into the market. Understanding the requirements and benefits of being a tax exempt business is crucial for effective financial planning and compliance with Japanese tax regulations.

電帳法 (dencho-ho) refers to the Electronic Bookkeeping Act in Japan, a law that governs the electronic storage and management of financial records and documents. This act allows businesses to maintain their accounting records digitally, provided they adhere to specific guidelines and standards set by the Japanese tax authorities.

The main objective of the Electronic Bookkeeping Act is to promote efficiency and accuracy in record-keeping by leveraging digital technology. Businesses that choose to use electronic bookkeeping must ensure that their digital records are secure, easily accessible, and verifiable. This includes using reliable software for data management, maintaining backups, and implementing measures to prevent data tampering or loss.

Complying with the act can streamline accounting processes, reduce paperwork, and facilitate easier tax audits. However, businesses must obtain approval from the tax office to store their records electronically and demonstrate that their systems meet the required standards.

By adopting electronic bookkeeping under this act, businesses can benefit from more efficient financial management and potentially lower administrative costs, while also ensuring compliance with Japanese tax regulations.