Japanese Business Glossary

退職所得 (taishoku shotoku) refers to retirement income or severance pay in Japan. It is the lump-sum payment or pension received by an employee upon retirement or resignation from their job. This type of income is subject to specific tax treatment, which often results in favorable tax rates compared to regular income.

The calculation of taxes on on retirement income involves several steps. First, the total amount of retirement income is reduced by a retirement income deduction, which varies based on the number of years of service. The remaining amount is then divided by two, effectively lowering the taxable income. Finally, the standard income tax rates are applied to determine the tax liability.

This preferential tax treatment recognizes the long-term contributions of employees and aims to provide financial support as they transition into retirement. Proper reporting and calculation of retirement income are crucial for ensuring that retirees receive the correct tax benefits and avoid any issues with tax authorities.

減価償却 (genka shokyaku) refers to depreciation in Japan, the accounting process of allocating the cost of a tangible asset over its useful life. This method recognizes the gradual decrease in value of assets like buildings, machinery, and equipment due to wear and tear, usage, and obsolescence.

In accounting,* genka shokyaku* (depreciation) allows businesses to spread the expense of an asset over several years, matching the cost with the revenue generated by the asset. This process provides a more accurate representation of an asset’s value and the company’s financial position.

Several methods can be used for calculating depreciation, including the straight-line method and declining balance method. The choice of method and the specific rules governing depreciation, such as useful life estimates and residual values, are determined by Japanese tax laws and accounting standards.

Implementing depreciation helps businesses reduce their taxable income by accounting for the decreasing value of their assets. Properly managing depreciation is essential for compliance with tax regulations, accurate financial reporting, and effective long-term financial planning.

寡婦 (kafu) refers to a widow in Japan, a woman whose spouse has passed away. In the context of Japanese tax law, a widow also encompasses certain tax benefits and deductions available to widows, aiming to provide financial support and ease the tax burden on single-parent households.

A woman qualifies for the widow deduction if she meets specific criteria, such as not being remarried and having dependent children or meeting other requirements set by tax regulations. The deduction reduces the widow's taxable income, thereby lowering the amount of tax she owes. There is also a special category called "特別寡婦" (tokubetsu kafu), or special widow, which offers an even higher deduction for those who meet additional criteria, such as having a minor dependent child and a lower annual income.

These tax deductions for widows recognize the financial challenges faced by single-parent families and provide some relief by reducing their overall tax liability. Properly claiming this deduction requires understanding the eligibility criteria and ensuring accurate documentation when filing tax returns.

The term 勤労学生控除 (kinro gakusei kojo) refers to the working student deduction in Japan. This tax deduction is available for students who are working while pursuing their studies. It allows eligible students to reduce their taxable income, thereby lowering the amount of income tax they need to pay.

To qualify for this deduction, students must meet certain criteria. They must be enrolled in an educational institution, such as a university, high school, or vocational school. Additionally, their earned income must primarily come from employment rather than other sources like investments. There is also a limit on the amount of income that can be earned to be eligible for this deduction.

The purpose of the working student deduction is to alleviate the financial burden on working students, enabling them to balance their educational and employment commitments without facing excessive tax liabilities. This policy acknowledges the efforts of students who work to support themselves while continuing their education.

The term 公売 (kobai) refers to a public auction or sale conducted by the Japanese government or local authorities. These auctions are typically held to sell off assets that have been seized due to non-payment of taxes or other debts. The assets can include real estate, vehicles, valuable items, and other property. The proceeds from these sales are used to settle the outstanding debts owed by the original owners.

Public auctions are announced in advance, and anyone can participate, including individuals and businesses. The process is designed to be transparent and competitive, ensuring that the assets are sold at fair market value. Interested buyers must register to participate in the auction, and they may be required to pay a deposit to bid on certain items. Successful bidders are usually required to complete the purchase within a specified time frame.

Public auctions serve as a means for the government to recover unpaid taxes and other debts efficiently while providing opportunities for buyers to acquire assets at potentially lower prices than the market rate. This system also ensures that the sale process is conducted fairly and openly.

The term 連帯債務による借入金の額 (rentai saimu ni yoru kariirekin no gaku) refers to the amount of borrowed money under joint and several liability. In Japan, joint and several liability means that multiple borrowers are collectively responsible for repaying a debt. Each borrower is individually liable for the full amount of the debt, not just their share.

When a loan is taken out under this arrangement, all parties involved are equally accountable for the repayment. If one borrower fails to pay, the lender can demand repayment from any or all of the other borrowers. This type of liability is often used in situations where co-borrowers, such as business partners or family members, take out a loan together.

The amount of borrowed money under joint and several liability is important because it determines the financial responsibility of each borrower. Lenders prefer this arrangement as it reduces the risk of non-payment by having multiple sources to recover the loan from. For the borrowers, it means a shared obligation, where each person must be prepared to cover the entire debt if necessary. This legal concept ensures that lenders have a higher chance of recovering the loaned amount, while borrowers need to carefully consider the implications of such an agreement.