Japanese Business Glossary

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.

課税 (kazei) refers to "taxation" in English. It is the process by which a government or taxing authority imposes a financial charge or levy on individuals, businesses, or other entities.

Taxation is a primary method for governments to generate revenue, which is used to fund public services and infrastructure. The term kazei encompasses various types of taxes, including income tax, consumption tax (similar to VAT or GST), property tax, and more.

住宅借入金等特別控除申告書 (jūtaku kariirekin-to tokubetsu kojo shinkokusho) refers to the special mortgage loan deduction declaration form in Japan.

This form is used by taxpayers to claim a special tax deduction for interest paid on mortgage loans for the purchase, construction, or renovation of a qualifying residential property. The deduction aims to reduce the taxpayer's income tax liability by allowing a portion of the mortgage interest to be deducted from their taxable income.

The form must be submitted to the tax authorities to apply for this deduction, and it typically requires detailed information about the mortgage loan, the property, and the taxpayer's financial situation.

源泉控除対象配偶者 (gensen kojo taisho haiguusha) refers to a dependent spouse eligible for a specific tax deduction in Japan. This concept is part of the Japanese income tax system, where certain conditions must be met for a spouse to qualify for this deduction.

The spouse must be legally married to the taxpayer and have an annual income of 1,500,000 yen or less. Additionally, the taxpayer's taxable income must be 10 million yen or less. The taxpayer must also claim the spouse as a dependent on their tax return.

If these conditions are satisfied, the taxpayer can receive a deduction, reducing their taxable income and overall tax liability. This system is designed to support households where one spouse earns significantly less or is a homemaker, providing financial relief to the primary income earner.