Japanese Business Glossary

専従者 (senjūsha) refers to a family member who works exclusively in a family business in Japan. This term is commonly used in the context of tax deductions for small businesses and self-employed individuals. If a family member, such as a spouse, child, or other relative, works full-time in the family business and meets certain conditions, their salary can be deducted as a business expense, reducing the overall taxable income of the business.

To qualify as a senjusha, the family member must be at least 16 years old, work primarily for the business, and receive a reasonable salary that is commensurate with their duties. The business owner must keep accurate records of the family member's employment, including work hours and salary payments, to substantiate the deduction.

This deduction is known as 専従者控除 (senjūsha kojo) and is designed to support family-run businesses by acknowledging the contributions of family members and reducing the tax burden on the business. Proper documentation and adherence to tax regulations are essential to claiming this deduction, ensuring compliance with Japanese tax laws and maximizing potential tax savings for the business.

譲渡 (joto) refers to the transfer or assignment of rights, ownership, or property from one party to another in Japan. This term is commonly used in various contexts, including real estate, business transactions, and intellectual property. When a joto occurs, the original owner (the assignor) relinquishes their rights or ownership, and the recipient (the assignee) gains those rights or ownership.

In the context of real estate, joto might involve the sale or transfer of property ownership. In business, it could refer to the transfer of shares, assets, or even entire companies. For intellectual property, joto may involve the transfer of rights to patents, trademarks, or copyrights.

The process of joto typically involves a formal agreement that outlines the terms and conditions of the transfer. This agreement ensures that both parties are clear about their rights and obligations. Proper documentation and, in some cases, registration with relevant authorities are necessary to make the transfer legally effective.

In financial and legal contexts, accurately handling joto is crucial for ensuring that the transfer is recognized and enforceable, protecting the interests of both parties involved. This process helps in maintaining clear and organized ownership records and supports transparent and fair transactions.

給与収入 (kyūyo shūnyū) refers to employment income or salary income in Japan. This is the total amount of money received by an individual from their employer as compensation for work performed. Kyūyo shūnyū includes not only the base salary but also various allowances, bonuses, overtime pay, and other forms of monetary compensation provided by the employer.

This type of income is subject to income tax, social insurance premiums, and other deductions as mandated by Japanese law. Employers typically withhold these taxes and contributions from the employee's salary and remit them to the tax authorities on the employee's behalf. The amount of tax withheld is based on the individual's income level and personal allowances.

Accurately reporting kyūyo shūnyū is essential for tax purposes, as it determines the amount of income tax owed by the individual. At the end of the fiscal year, employees receive a tax certificate (源泉徴収票 = gensenchoshūhyo) from their employer, summarizing their total earnings and the taxes withheld. This certificate is used when filing annual income tax returns to ensure proper tax compliance and to claim any potential tax refunds or additional payments. Proper management and reporting of 給与収入 are vital for maintaining financial transparency and legal compliance.

法定調書合計表 (hotei chosho gokei hyo) refers to the statutory report summary table in Japan. This document is part of the annual tax reporting requirements for businesses and is submitted to the tax authorities. The hotei chosho gokey hyo provides a summary of various statutory reports that a business is required to file, such as salary payment reports, dividend payment reports, and reports on payments to subcontractors.

The summary table includes aggregated information about payments made by the business over the fiscal year, such as total amounts paid to employees, contractors, and shareholders. It ensures that all relevant financial activities are accurately reported and that the business complies with tax laws.

Submitting the hotei chosho gokei hyo is crucial for maintaining transparency and accountability in financial reporting. It helps tax authorities verify the accuracy of the reported income and ensures that the correct amount of taxes is paid. Businesses must prepare this summary table carefully, ensuring all figures are accurate and all required supporting documents are included.

償却 (shokyaku) refers to amortization or depreciation in Japan. This accounting process involves systematically reducing the book value of an asset over its useful life. It is used to allocate the cost of tangible and intangible assets, such as buildings, machinery, equipment, and patents, over the periods during which they generate economic benefits.

Shokyaku is essential for accurate financial reporting and tax compliance. It reflects the wear and tear, usage, or obsolescence of an asset. For tangible assets, this process is called depreciation, while for intangible assets, it is referred to as amortization. The amount of depreciation or amortization expense is recorded in the financial statements annually, reducing the asset's book value and impacting the company's net income.

Different methods can be used to calculate depreciation, such as the straight-line method, which spreads the cost evenly over the asset's useful life, or accelerated methods, which allocate higher expenses in the earlier years. The chosen method must comply with Japanese accounting standards and tax regulations.

Properly managing shokyaku ensures that a company's financial statements accurately represent the value of its assets and helps in planning for future capital expenditures and investments.

請負契約 (ukeoi keiyaku) refers to a contract for work or a contract for services in Japan. This type of agreement is commonly used in construction, manufacturing, and various service industries. Under ukeoi keiyaku, one party (the contractor) agrees to complete a specific project or provide certain services for another party (the client) in exchange for compensation.

The contract details the scope of work, the specifications, the timeframe for completion, and the payment terms. It may also include clauses related to quality standards, penalties for delays, and procedures for handling changes or unforeseen issues during the project.

This type of contract is legally binding, and both parties are obligated to fulfill their respective responsibilities as outlined in the agreement. The contractor must complete the work to the agreed-upon standards and within the specified timeframe, while the client must provide the necessary support and make payments as stipulated in the contract.

This type of contract helps ensure clarity and accountability, providing a clear framework for managing projects and services. Properly drafting and adhering to the terms of a 請負契約 is crucial for preventing disputes and ensuring the successful completion of the contracted work.