The Mipro Guide toStarting a Business in Japan~Tax Edition~

外国人のための起業ガイドブック（税務解説編）To readers of this guidebook“The Mipro Guide to Starting a Business in Japan” is designed to provide information that will help foreigners
wishing to start business in Japan.
This “Tax Edition” provides explanations on taxes levied and tax procedures required according to businessstructures and the features, advantages, and disadvantages of each when foreign-affiliated companies start abusiness in Japan.
The following is a brief summary of the contents of this Guidebook.

I. Taxes and tax procedures according to business structureThis chapter provides an explanation of taxes levied on foreign entrepreneurs establishing business in Japan
categorized into those capitalized by individual entrepreneurs and those capitalized as corporations. It is designed
to give the reader an understanding of tax types and rates as well as an annual schedule of tax procedures.

II. Business structure for foreign-affiliated companies entering Japan
This chapter explains business structures for foreign companies advancing business in Japan with foreign capital.
Taxes related to the businesses are handled in the same manner as explained in chapter I. Readers can gainreference for selecting one of three business structures: representative office, branch office, or local subsidiary.

III. ReferenceThis chapter provides a chart of Japan’s tax treaty network and a list of contacts for inquiries about taxes andstarting a business in Japan.

AuthorHiroko Sakashita, Certified Public Tax Accountant
Partner, Sakashita International Tax Accountant Co.
Certified as a tax accountant in 1996.
After engaged in filing of tax income returns for companies and individuals at a tax accounting
office, worked for an IT company as an internal auditor and then for a tax accountant corporation as
an international tax consultant.
Opened Sakashita International Tax Accountant Office in 2005 (reorganized as a tax accountant
corporation in 2010). Provides tax and accounting services mainly for foreign companies andsupports foreign residents in Japan for their business start-up.
Also served as a lecturer for MIPRO Business Start-up Seminars.

March 2023, Manufactured Imports and Investment Promotion Organization (MIPRO)Table ofContents

I.Taxes and tax procedures according 			to business structure

１

Introduction������������������������� 3

２

Types of taxes ������������������������ 3

３

Taxation method ���������������������� 4

４

Due date for filing returns ����������������� 5

５

Tax rate���������������������������� 7

６

Consumption Tax ���������������������� 10

７

Notifications to be submitted when commencing business � 13８

Benefits of filing a blue return��������������� 15

９

Determination of resident and non-resident classification � 17

10

Range of taxable income according to resident status � 18

II. Business structure for foreign-affiliatedcompanies entering Japan

1

Introduction������������������������� 20

2

Representative offices ������������������� 20

3

Branch offices ������������������������ 21

4

Local subsidiaries ���������������������� 25

5

Summary��������������������������� 28

6Conclusion�������������������������� 29

III. Reference
Appendix: Japan's Tax Convention Network
Inquiries related to taxes
Contact Information for starting businessI. Taxes and tax procedures according
to business structure
1 Introduction
This chapter explains the types of taxes levied and tax procedures required when (1) starting a sole
proprietor business, or (2) establishing a corporation by an individual contributing capital andconducting business as a corporation. This chapter focuses on taxes levied on main businesses;
therefore, information about property taxes, such as inheritance and real estate acquisition taxes, which
are levied when acquiring real estate, are omitted. Information for corporation is provided for SMEs
with capital of less than 100 million yen and which are not 100% subsidiaries of companies with capitalof 500 million yen or more.

2 Types of taxes(1) For sole proprietorships
National taxes: Income tax, Special income tax for reconstruction1, Consumption tax
Local taxes: Local residence tax, Enterprise tax, Fixed property tax
Income earned by sole proprietorships are classified as business income, and income tax, local
residence tax (in part), and enterprise tax are levied on profits after subtracting expenses from revenue(income). These taxes are levied only when a profit is earned, so this means that no taxes are levied if a
deficit is incurred, in principle. For business income, a tax return must be filed by the taxpayer by March
15 of the following year. (To be described hereafter.)
In contrast, a salary received from a company is classified as employment income. In the case of
employment income, withholding tax is collected from each monthly payment, and income tax issettled by the year-end tax adjustment upon taking the necessary procedure. This means no income
tax return needs to be filed if there is no income other than employment income.
Consumption tax is levied against the volume of business if the sole proprietorship engages inbusiness worth more than a certain amount of money. As a rule, consumption tax paid out whenpurchasing merchandise (tax prepaid) is subtracted from the consumption tax received through sales
to customers (tax received), and the remaining amount is paid to the government regardless of thebusiness' profit or loss. Proprietors may select from either the standard or the simplified tax system. (Tobe described hereafter.)
Fixed property tax is levied on the land, buildings, and depreciable assets that proprietors own.

Terminology
1Special income tax for reconstruction is the government’s source for securing the necessary financial resources toimplement policy measures for reconstruction from the Great East Japan Earthquake, and is categorized asnational tax. Taxpayers are required to file and pay the special income tax to the nation based on the samerequirements for the filing and payment of income tax.

3

I. Taxes and tax procedures according to business structure  (2) For corporations
National taxes: Corporate tax, Local corporate tax2, Consumption tax
Local taxes: Corporate residence tax, Corporate enterprise tax, Fixed property tax
As a result of engaging in corporate activities, corporate tax, local corporate tax, corporate residencetax (in part), and corporate enterprise tax (in part) are levied on profits after subtracting expenses fromrevenue (income). These taxes are levied only when a profit is earned, so this means that no taxes arelevied if a loss is incurred, in principle. All corporations are required to file a tax return within twomonths after the end of the accounting period. (To be described hereafter.)Consumption tax is levied against the volume of business. As a rule, consumption tax paid out whenpurchasing merchandise (tax prepaid) is subtracted from the consumption tax received from customer
sales (tax received), and the remaining amount is paid to the government regardless of business profit
or loss. Corporations may select either the standard or simplified tax system. (To be describedhereafter.)
Fixed property tax is levied on the land, buildings, and depreciable assets corporations own.

3 Taxation method(1) For sole proprietorships
3⃝Taxes levied through self-assessment : Income tax, Special income tax for reconstruction,
Consumption tax, Depreciable property tax (Fixed property tax)
Taxes to be filed and paid individually by the taxpayer should be filed and paid to the tax office thathas jurisdiction over the taxpayer's address (or residence) by the due date. In addition, taxpayers
have the choice of filing through the tax office that has jurisdiction over the business office.
4⃝Taxes levied through official assessment : Residence tax, Enterprise tax, Fixed propertytax (land and buildings)
Make payment according to and by the due date indicated on the tax notice sent from the relevant
tax office.

(2) For corporations⃝Taxes levied through self-assessment: Corporate tax, Local corporate tax, Corporate
residence tax, Corporate enterprise tax, Consumption tax, Depreciable property tax (Fixed
property tax)
File tax returns through the tax office and prefectural/municipal office that have jurisdiction over theregistered address of the business by the announced due date, and make payment at the office.
⃝Taxes levied through official assessment: Fixed property tax (land and buildings)
Make payment according to and by the due date indicated on the tax notice sent from the relevant
tax office.
Terminology
2

3

4

4

Local corporate tax is calculated by multiplying the corporate tax amount with a tax rate of 10.3%. It is categorized
as national tax because its revenue becomes the nation's financial resources for the local allocation tax which isallocated to local governments. Accordingly, taxpayers are required to file and pay the local corporate tax to thenation based on the same requirements for the filing and payment of the corporate tax.
Self-assessment taxation is a system where the tax amount is primarily determined through the filing of a tax
return by each taxpayer. Taxes including corporate tax, consumption tax, income tax, inheritance tax and gift tax
fall under this category.
Official assessment taxation is a system where the tax amount is determined by the nation or local governments,
etc. and the taxpayer pays tax based on their notice. Taxes including fixed property tax, real estate acquisition tax
and automobile tax fall under this category.

  I. Taxes and tax procedures according to business structure

4 Due date for filing returns(1) For sole proprietorships
The business term (accounting period) for sole proprietorships is from January 1st to December 31st(calendar year taxation) of the relevant year, and the business term cannot be revised within the year.
⃝Income tax
Tax returns must be filed by March 15th of the following year.
Therefore, for example, the due date for the filing of tax returns for the 2022 business term is March
15, 2023.
⃝Consumption tax
Tax returns must be filed by March 31st of the following year.
Therefore, for example, the due date for the filing of tax returns for the 2022 business term is March
31, 2023.

(2) For corporations
Corporations may freely select their business term (accounting period). The accounting period may
be changed at mid-term with justifiable reason.
⃝Corporate tax, Local corporate tax, Corporate residence tax, Corporate enterprise tax
Tax returns must be filed within 2 months of the end of business term. However, if it is stated in a
corporation’s articles of incorporation that its shareholders' meeting or general meeting of members
is to be held within 3 months of the end of business term, the filing due date may be extended by
one month by applying for an extension. This is based on the principle of final accounts, which statesthat tax returns should be filed based on financial statements approved by the shareholders'meeting or general meeting of members. Thus, the due date for filing the tax return in this case iswithin 3 months of the end of the business term. When the due date is extended, interest tax islevied for the extended period. Interest tax can be calculated into deductible expenses as interest
paid.
⃝Consumption tax
Tax returns must be filed within 2 months of the end of business term. If, however, the due date forfiling a corporate tax return has been extended, the due date for filing a consumption tax return may
also be extended by a month by applying for an extension. Thus, the due date for filing the tax returnin this case is within 3 months of the end of the business term. When the due date is extended,interest tax is levied for the extended period. Interest tax can be calculated into deductible expenses
as interest paid.

Individual

Corporation

5

I. Taxes and tax procedures according to business structure  The following is the annual schedule of due dates for filing tax returns.
Fig. 1 Annual Schedule for the Filing and Payment of Taxes(1) For Sole Proprietorships

Business Year

Jan 1

Jul 10Dec 31①

Jan 20 Jan 31

Mar 15 Mar 31

②

④

③

⑤

① Due date for payment of withholding income tax(for the period from Jan. to June of the relevant calendar year:
under special condition of semiannual payment)② Due date for payment of withholding income tax(for the period from July to Dec. of the previous calendar year:
under special condition of semiannual payment)③ Submission of Legal Record Total Table including Withholding Tax Certificate for earned income, etc.
(Total of income subject to withholding and withholding income tax in the previous calendar year)
Submission of Declaration of Depreciable Assets(Declaration of depreciable assets owned as of Jan. 1 of the current calendar year)④ Filing and payment of income tax and special income tax for reconstruction for the previous business year
Blue Return Account Statement for income tax for the previous business year
(in the case of blue return filing)⑤ Filing of tax returns for national and local consumption taxes for the previous business year

(2) For Corporations (whose business year ends at the end of March)
Business Year

Apr 1

Jul 10Jan 20 Jan 31

①

②

③

Mar 31

May 31

Jun 30④⑤④′⑤′① Due date for payment of withholding income tax(for the period from Jan. to June of the relevant calendar year:
under special condition of semiannual payment)② Due date for payment of withholding income tax(for the period from July to Dec. of the previous calendar year:
under special condition of semiannual payment)③ Submission of Legal Record Total Table including Withholding Tax Certificate for earned income, etc.
(Total of income subject to withholding and withholding income tax in the previous calendar year)
Submission of Declaration of Depreciable Assets(Declaration of depreciable assets owned as of Jan. 1 of the current calendar year)④ Filing and payment of national and local consumption taxes for the previous business year
④ Filing of tax returns for national and local consumption taxes for the previous business year
(in the case of a one-month extension for filing the corporate tax return)⑤ Filing and payment of corporate tax and local corporate tax for the previous business year
Filing and payment of corporate enterprise tax and corporate residence tax for the previous business year
⑤ Filing of tax returns for corporate tax and local corporate tax for the previous business year
(in the case of a one-month extension for filing the corporate tax return)
Filing of tax returns for corporate enterprise tax and corporate residence tax for the previous business year
(in the case of a one-month extension for filing the corporate tax return)6  I. Taxes and tax procedures according to business structure

5 Tax rate(1) For sole proprietorships
The income tax rate is categorized into 7 levels, from 5% to 45%, and calculated on progressive tax
rates5, with the exception of separate taxes6 (taxes levied when disposing land, buildings, stock, etc.).
(See Fig. 2)
Fig. 2 Quick Income Tax Calculation Table

Taxable Income＊＊

Tax Rate

Amount of Deduction¥1,000 – ¥1,949,000

5%¥0¥1,950,000 – ¥3,299,000

10%¥97,500¥3,300,000 – ¥6,949,000

20%¥427,000¥6,950,000 – ¥8,999,000

23%¥636,000¥9,000,000 – ¥17,999,000

33%¥1,536,000¥18,000,000 – ¥39,999,000

40%¥2,796,000¥40,000,000 or more

45%

¥4,796,000

According to Japanese laws and ordinances as of April 1, 2022.		
Taxpayers are required to pay special income tax for reconstruction (2.1% of their income tax liabilities of the relevant year, inprinciple) in addition to income tax on income arising in the period from January 1, 2013 to December 31, 2037.

For example, the tax on a taxable income of ¥5 million is as shown below:
Income tax: ¥5,000,000 × 20% - ¥427,500＝¥572,500(Any fraction of less than one hundred yen shall be rounded down.)
Special income tax for reconstruction7 : ¥572,500 × 2.1%＝¥12,000(Any fraction of less than one hundred yen shall be rounded down.)
Residence tax is calculated in two parts: per income, taxed against income, and per capita levy8,
taxed uniformly for residents in the municipality. The standard tax rate is set for per income and per
capita levy, which differ by municipality, and should be checked at the relevant municipal office. (SeeFig. 3)

Terminology
5

6

7

8

Progressive taxation is a method to tax income at a progressive tax rate (the tax rate increases as the taxable
income increases). Examples include income tax and inheritance tax.
Separate taxation, which is applied to transfer income when disposing of land or building, or capital gains, etc., is amethod to assess tax on certain income separately from income subject to aggregate taxation. Aggregate
taxation is a method to assess tax on certain income by aggregating several kinds of income such as salary
income, business income and real estate income, etc.
Special income tax for reconstruction is a newly introduced tax for reconstruction from the Great East Japan
Earthquake. An additional 2.1% tax is imposed on all forms of income taxes on income arising in the period fromJanuary 1, 2013 to December 31, 2037.
Per capita levy is a type of residence tax that is levied regardless of the amount of taxable income. This means afixed amount is levied even if a business has a deficit balance.

7

I. Taxes and tax procedures according to business structure  Fig. 3 Standard Rate of Residence Tax

Prefectural Residence Tax

Municipal Residence Tax

Per income

4%6%

Per capita levy (standard rate)¥1,500¥3,500＊According to Japanese laws and ordinances as of April 1, 2022.
T ax rate per income differs by municipality. For the Tokyo Metropolitan Area, the prefectural residence tax rate is 4% while
the municipal residence tax rate is 6%.
＊
Rate of per capita levy differs by municipality. For the Tokyo Metropolitan Area, the prefectural per capita levy is ¥1,500
while the municipal per capita levy is ¥3,500.
* Prefectural and municipal residence taxes are combined in the 23 wards of Tokyo.
＊

Enterprise tax is levied on Class 1, 2 and 3 businesses. The standard tax rate is set for per income andper capita levy, which differ by municipality, and should be checked at the relevant municipal office.
(See Fig. 4)
Fig. 4 Enterprise Tax Rate (Tokyo)

Class

Tax
Rate

Type of Business
Merchandising

Forwarding

Restaurants

Sightseeing park or place

InsurerMarinaFood service

Product dealer

Financing

Warehousing

BrokerReal estate sales

RentalParking

AgencyAdvertising

Contracting

Intermediary

Private detective

Printing

Wholesaler

GuidePower supply

Publishing

Money exchange

Ceremony business

Quarrying

Photographer

Bathhouse (Sauna house)－

Telecommunication

Rental room

Entertainment－

Transportation

Inn－

Fisheries

Pachinko or othergaming hall
Firewood and charcoal
production

Doctor

Notary public

Design supervisor

Bathhouse (Sento)

DentistPatent attorney

Real estate appraiser

Dental hygienist

Pharmacist

Tax accountant

Designer

Dental technician

Real estate rental
Class 1Business 5%(37)
Manufacturing

Class 2Business(3) 4% Stock breeding

Class 3 5% Veterinarian
Business(30)
LawyerJudicial scrivener

Certified public accountant Master of various arts

Surveyor

Accountant

BarberSocial insurance
consultant

Beautician

Land and house
investigator
Maritime procedure
agent

Cleaner

Printing and processing

Administrative scrivener Consultant

finger pressure therapy, acupuncture, moxibustion,
3% Massage,judo- osteopathy or any other therapeutic care, etc.
＊
＊

8

－

According to Japanese laws and ordinances as of April 1, 2022.
Tax rate differs by municipality.

Farrier  I. Taxes and tax procedures according to business structure(2) For corporations
The corporate tax rate is 15% for the ¥8 million or less portion of the year's taxable income, and23.2% on the portion exceeding ¥8 million. Local corporate tax is 10.3% of the amount of corporate tax.
(See Fig. 5)
Fig. 5 Corporate Tax Rate and Local Corporate Tax Rate

Tax
Corporate Tax

IncomeTax Rate

Income over ¥8 million per year

23.2%

Income of ¥8 million or less per year

15.0%

Local Corporate Tax＊

Corporate tax ×10.3%

According to Japanese laws and ordinances as of April 1, 2022.

Corporate residence tax consists of a “prefectural residence tax” that is paid to the prefecture and a“municipal residence tax” that is paid to the municipality. However, an exception applies to corporationsin the 23 wards of Tokyo. Corporations in the 23 wards of Tokyo pay a “corporate metropolitan residencetax” that includes the amount corresponding to the municipal residence tax.
Corporate residence tax is calculated in two parts: per income, which is taxed against income, andper capita levy, which is taxed uniformly for residents of the municipality, both levied according totaxable income, amount of capital and number of employees. A standard tax rate is set for per income
and per capita levy, which differs by municipality, and should be checked with the relevant municipal
office. (See Fig. 6)
Fig. 6 Corporate Residence Tax Rate and Per Capita Levy (Tokyo)

Per
IncomeEnd-of term Capital, etc.

＊＊

Over ¥10 million and¥100 million or lessPrefectural Tax Municipal Tax Prefectural Tax Municipal Tax
Corporate ¥10 million or less
Tax
Over ¥10 million

Per Capita Levy (Annual Tax)＊

¥10 million or less

1.0%

6.0%

1.0%

6.0%

2.0%

8.4%

2.0%

8.4%

¥20,000¥50,000¥50,000¥130,000

According to Japanese laws and ordinances as of April 1, 2022.
This table applies to a corporation with a number of employees in the relevant workplace, etc. of 50 or less.
Tax rate per income and per capita levy differs by municipalty.

Corporate enterprise tax is calculated per income, taxed against income; per value added, taxedagainst value added generated from business activities (i.e. salary or rent paid); and per capital, taxedagainst the amount of capital. For corporations with capital of ¥100 million or less, only per income tax
is levied. The tax rate differs by prefecture, and should be checked with the relevant prefectural office.
(See Fig. 7)

9I. Taxes and tax procedures according to business structure  Fig. 7 Corporate Enterprise Tax Rate (Tokyo : companies with workplaces in Tokyo only)¥25 million orless per year

Over ¥25 million
per yearTaxable Income Segment

Per Income

Taxable Income¥4 million or less per year
Over ¥4 million and ¥8 million
or less per year
Over ¥8 million per year
¥4 million or less per year
Over ¥4 million and ¥8 million
or less per year
Over ¥8 million per year

Rate of Corporate
Rate of Special
Enterprise Tax
Corporate Enterprise Tax
3.5%
5.3%
7.0%
3.75%

Corporate Tax Liabilities
per income
×37.0%

5.665%
7.48%＊

According to Japanese laws and ordinances as of April 1, 2022.
＊
Tax rate differs by prefecture.

6 Consumption Tax(1) Determining taxable and tax-exempt9 business entities
Sole proprietorships do not have an obligation to pay consumption tax in their first business year ofcommencing their business. Corporations, on the other hand, are exempted from tax in their first term
after establishment if their amount of capital at the time of establishment was less than 10 million yen;they are taxed (in their first and second terms after establishment) if their amount of capital at the timeof establishment was more than 10 million yen.
For the second year for sole proprietorships and for the second term for corporations establishedwith a capital of less than 10 million yen, a judgment of whether consumption tax is to be paid or
exempted is decided in accordance with their financial standing in their first year of business or theirfirst term after establishment.

(2) Consumption tax rate
The standard rate of consumption tax is 10%. However, a reduced tax rate of 8% is applied to items
that are subject to the reduced tax rate, such as food and beverages excluding alcoholic beverages anddining out. (See Fig. 8)
Fig. 8 Consumption Tax Rate

IncomeTax rate

Standard tax rate

10%

Reduced tax rate8%

Items subject to the reduced tax rate
・Food and beverages excluding alcoholic beverages and dining out					(Take-out and deliveries are not considered as dining out)
・Subscriptons to newspapers issued more than twice a week
* According to Japanese laws and ordinances as of April 1, 2022.

Terminology
910

Businesses that fall under the tax-exempt category do not have an obligation to pay consumption tax. At the sametime, however, they can neither receive a tax refund, because they cannot file a tax return for consumption tax.

  I. Taxes and tax procedures according to business structure(3) Calculation method
Consumption tax is calculated by either the standard or simplified method. If sales are not expected
to reach more than a certain amount, the standard method is frequently more advantageous, so thecalculation of consumption tax according to the standard method will be explained below.
Under the standard method, consumption tax is calculated by subtracting the consumption tax
paid, when purchasing merchandize, from the consumption tax received through customer sales, andthe remaining amount is paid to the government. For this reason, if the consumption tax paid when
making the initial investment on facilities exceeds the consumption tax received from customer sales,
submission of a consumption tax return may result in a refund. Since tax-exempt business entities
cannot file a consumption tax return, they are exempt from payment of consumption tax. However,they are also ineligible to receive a consumption tax refund. Tax-exempt business entities that wish toreceive a consumption tax refund may choose to become a taxable payer. However, once they decide
to become a taxable payer, they cannot change their status for 2 years, so the matter should be given
sufficient consideration before choosing to become a taxable payer. (See Fig. 9)
Fig. 9 Calculation of Consumption Tax
A corporation with capital of ¥5 million
1st Business
2nd Business
3rd Business
4th Business
Year
Year
Year
Year
Oct 1
Mar 31Mar 31Mar 31Net Sales¥4 million¥12 million¥15 million¥20 million

Product Costs¥10 million¥8 million¥12 million¥15 million

Determination

Tax-exempt

Tax-exempt

Tax-exempt

If company chooses
to be a taxable payer

TaxableCalculation of Consumption Tax
Consumption tax received
Consumption tax prepaid
Consumption tax payment (refund)¥400,000¥1,000,000(¥600,000)(¥6 million in the first half ofthe business year)

TaxablePayment

×¥1,200,000¥800,000¥400,000¥1,500,000¥1,200,000¥300,000¥2,000,000¥1,500,000¥500,000

Can choose to be tax-exemptin the 3rd business year

11

I. Taxes and tax procedures according to business structure  (4) Qualified invoice system
On October 1, 2023, the qualified invoice system will be introduced as a method for claiming apurchase tax credit on consumption tax10. Conventionally, suppliers in Japan have been able to claim apurchase tax credit on consumption tax they have paid, regardless of whether they are taxable or taxexempt business entities. As such, tax-exempt business entities were frequently seen charging theircustomers consumption tax. When the qualified invoice system is introduced, purchase tax credits will
apply only to qualified invoices issued by qualified invoice issuers. This means that tax-exempt business
entities will no longer be able to charge their customers consumption tax, as a rule. Furthermore, fromthe customer standpoint, there might be a tendency to avoid purchases from tax-exempt business
entities. Therefore, tax-exempt business entities should consider registering as a qualified invoice issuer
and not only charging their customers consumption tax but also filing a return on consumption tax
themselves.
Business entities must apply with the tax authority to register as a qualified invoice issuer. Once they
apply, they will be given a registration number by the tax authority. That number is to be specified on
the invoice along with the amount of consumption tax.
Qualified invoice issuers can be confirmed in the “List of qualified invoice issuers” provided by the
National Tax Bureau (https://www.invoice-kohyo.nta.go.jp/index.html).

Terminology
10

12

Claiming a purchase tax credit on consumption tax means calculating the payment amount of consumption tax
by subtracting the amount of suspense consumption tax paid by the taxable business entity from suspense
consumption tax received from the customer.

  I. Taxes and tax procedures according to business structure

7 Notifications to be submitted when commencing business(1) For sole proprietorships
An individual who commences their business needs to submit the following application forms. An
explanation and the due date of submission for each application form is as follows.
Fig. 10 Application Forms for Income Tax, Withholding Tax and Local Taxes Required to be

Submitted by Individuals when Commencing Business, and their Due Dates
Tax＊

Description

Due date, etc.

Notification ofCommencement or
Termination of Sole
Proprietor Business[1]When commencing businessWithin one month after the date of[2]When establishing a place ofcommencement of businessbusiness

Application Form for
Approval of filing Blue
Income Tax Return

When applying for blue return
filing (Various benefits areavailable when choosing blue
return filing)

Notification of Family
Employees' Salaries ofBlue Return Taxpayers

When including family
employees' salaries of blue
return taxpayers as business
expenses

In principle, by March 15 of the year for which asole proprietor wishes to file a blue return(When he/she starts business after Jan. 16 of
the relevant year, within 2 months from thedate of commencement)
By March 15 of the year for which a sole
proprietor wishes to include family employees'salaries as business expenses (When he/shestarts business or an relevant employee isadded after Jan. 16 of the relevant year, within
2 months from the date of commencement or
employment)

When establishing, relocating
or closing a salary-paying office,etc. (Excluding cases when
Within one month after the date of
Notification of Commencement establishment, relocation or closure
or Termination of Sole Proprietor
Business is submitted)
When a salary payer/employer At any time (A salary payer who has submitted
Application for Approval
whose employees are always
this application becomes eligible for these
Made in Relation to
fewer than 10 persons wishes to special provisions from withholding tax
Special Provisions forbe entitled to special provisions payments from two month after the month of
Due Dates forfor payment of withholding
application if they do not receive any notice ofWithholding Income Tax
income tax semiannuallydismissal from the relevant tax office)Consumption Tax

Notification of Choosing
When a tax-exempt businessto Become a Taxable
entity chooses to become aPayer of Consumption
taxable payer
Tax

Enterprise Tax and
Local Residence Tax

Notification of Business
Commencement

Local Residence Tax

Notification of
Establishment/
Relocation/Closure of a
Salary-paying Office

Local Government
Bureau of Taxation(Local Taxes)

Withholding Income Tax

Form, etc.

Municipal Office
Revenue Department(Local Taxes)

Tax Office(National Tax)

Income Tax

Destination
to Submit

Notification of Business
Commencement

By the day before the first day of the taxable
term from which the business entity chooses tobecome a taxable payer

When commencing business

Varies by prefecture.
Within one month from the date ofcommencement of business(within 15 days in the case of Tokyo)

When commencing business

Varies by municipality.
Within one month from the date ofcommencement of business

When conducting business within the 23 wards of Tokyo, submission of this form to a municipal office is not required.

13

I. Taxes and tax procedures according to business structure  (2) For corporations
A corporation which commences its business needs to submit the following application forms. An
explanation and the due date of submission for each application form is as follows.
Fig. 11 Application Forms for Corporate Tax, Consumption Tax, Withholding Tax and Local Taxes

Required to be Submitted by Corporations when Commencing Business, and their Due Dates

Destination
to Submit

TaxForm, etc.

Consumption Tax

Local Government
Bureau of Taxation(Local Taxes)

Enterprise Tax and
Local Residence Tax

Municipal Office
Revenue Department(Local Taxes)

Local Residence Tax

Withholding Income Tax

Tax Office(National Tax)

Corporate Tax

Notification of
Corporation
Establishment＊

Description
When establishing a corporation

Within 2 months after the date ofestablishment

Date immediately before the following[1] or [2], whichever comes first;
Application Form for When applying for blue return filing
Approval of Filing Blue (Various benefits are available when choosing [1]Date when 3 months have passed since
the date of establishment, or
blue return filing)
Return[2]Closing date of the first business year
When a corporation wishes to extend the due
date for filing its final corporate tax return if
Application for Special unable
to submit it within the predetermined Closing Date of the business year for which
Provision for Extension due date.
(This situation may arise if its articles
corporation wishes to extend the dueof the Due Date forof incorporation provide that the shareholder's adate
for the first time
Filing a Final Return
meetingorthegeneralmeetingofmembersisFormscheduled within three months of the end of
the business year, etc.)
When a corporation that has applied for an
Notification ofextension of the due date of its final corporate Closing Date of the business year for which
Extension of thea corporation wishes to extend the due
tax return is unable to file a consumption
Due Date for Filingdate for the first time
tax return by the due date and wishes ana Consumption Tax
extension
ReturnNotification of
the day before the first day of theChoosing to Become When a tax-exempt business entity chooses By
taxable term from which the businessto become a taxable payer
a Taxable Payer ofentity chooses to become a taxable payer
Consumption Tax
Notification of the
When establishing, relocating or closing aWithin one month after the date of
Establishment of asalary-paying office, etc.
establishment, relocation or closure
Salary-Paying Office
Application for
When a salary payer/employer whose
Approval Made in
Relation to the Special employees are always fewer than 10 persons
Provision for Due Dates wishes to be entitled to special provisions
for payment of withholding income tax
forWithholding Income semiannually
Tax
Notification of
Corporation
Establishment

When establishing a corporation

At any time (A salary payer who has
submitted this application becomes
eligible for these special provisions fromwithholding tax payments from 2 months
after the month of application if they do
not receive any notice of dismissal from therelevant tax office)
Varies by prefecture.
In the case of Tokyo, within 15 days of thedate of establishment of the corporation
In the case of Kanagawa, within twomonths of the date of establishment of thecorporation

When a corporation wishes to extend the due
date for filing its final corporate tax return if
Notification /unable to submit it within the predetermined Closing Date of the business year for which
Application fordate. (This situation may arise if its articles a corporation wishes to extend the due
Approval for Extension dueofincorporation
provide that the shareholder's date for the first timeof Due Date for Filing a meeting or the general
meeting of members is
Return Formscheduled within three months of the end of
the business year, etc.)
Notification ofWithin 2 months after the date ofCorporation
When establishing a corporation
establishment
Establishment
Whenacorporation
wishestoextendthedue
Copy of “Application
date for filing its final corporate tax return if
for Special Provision
Varies by municipality.
unable to submit it within the predetermined
for Extension of the
Closing Date of the business year for which
due date. (This situation may arise if its articles
Due Date for Filing a
corporation wishes to extend the dueofincorporation
providethattheshareholder's
Final Return Form” for meeting or the general meeting of members is adate
for the first time
corporate tax (withscheduled within three months of the end of the“received” seal)business year, etc.)

When conducting business within the 23 wards of Tokyo, submission of this form to a municipal office is not required.

National Tax Agency : Application forms
https://www.nta.go.jp/taxes/tetsuzuki/shinsei/index.htm
https://www.nta.go.jp/english/Guidelines.htm
14

Due date, etc.

  I. Taxes and tax procedures according to business structure

8 Benefits of filing a blue return
Proprietors or corporations can select either the blue or white return form. Use of the blue returnprovides favorable tax treatment; however, it requires that accounting ledgers be kept according to theprinciple of orderly bookkeeping (generally, double-entry bookkeeping).
In addition to requiring accounting ledgers to be kept, the blue return requires accounting ledgers
and documents to be retained over a certain amount of time. (See Fig. 12)
Fig. 12 Storage of Accounting Ledgers and Documents in the case of the Blue Return

Ledger/Document

Specific Examples

Retention Period

JournalGeneral ledger
Ledgers

Cash journal

7 years

Accounts receivable ledger
Accounts payable ledger
Fixed asset ledger, etc.
Bank bookReceipts

Documents

Invoices

7 years

Quotations, delivery notes, waybills, etc.
Contracts, etc.
Balance sheet
Documents (financial)

P/L statements

7 years

Inventory book, etc.
The blue return filing is advantageous for sole proprietors; however, limited management resources
and the time required for paperwork may counter the advantage. For corporations, on the other hand,
it is desirable to use the blue return filing in view of business relations and social responsibility. Here are
the major advantages of selecting to file a blue return. (See Fig. 13)
Fig. 13 Benefits of Filing a Blue Return

Submission destination

Sole Proprietorship

Special deduction for blue
return filing¥100,000 or ¥650,000(¥550,000 if electronic ledger
storage or electronic filing is not
used)

Corporation
Non-applicable

Applicable (notification of family
Payment of salaries to family
Applicable regardless of blue
employees' salaries of blue return
employees
return filingtaxpayers required)

Loss carried forward

3 years

10 years15

I. Taxes and tax procedures according to business structure  (1) For sole proprietorships⃝Special deduction for blue return filing
A special deduction of ¥650,000 (¥550,000 if electronic ledger storage or electronic filing is not used)
is granted from income when ledgers, such as journals, general ledgers, cash journals, bank books,
fixed asset ledgers, etc., are kept, and balance sheets and P/L statements are prepared based on theseledgers and attached to the return form. (Special deduction of ¥100,000 for simplified ledgers.)⃝Family employees' salaries of blue return taxpayers
The salaries of spouses and other family members, aged 15 and above, sharing livelihood with a blue
return taxpayer and who were paid salaries for the work performed in the business of the blue returntaxpayer, may be included in the business expenses within the appropriate range noted in theapplication and notification of change regarding family employees' salaries of blue return taxpayer
submitted to the tax office.
⃝Carry-forward deduction and carry-back refund of net loss
With respect to sole proprietorships that file a blue return, when there is a loss in business profit, anda net loss is incurred after settlement of profit and loss with other income, said loss can be carriedforward for the period of three years starting from the subsequent year with the loss deducted fromthe income each year. (See Fig. 13)(2) For corporations
11⃝Loss carried forward
In the case of corporations that file a blue return, a loss that has been incurred in a business year may
be carried forward 10 years from the next business year and deducted from the income of each of
those ten years. (See Fig. 14)

Fig. 14 Deduction of Loss Carried Forward
Loss from previous term: ¥2 million

Previous term

Corporate income tax for current term:(Current income ¥5 million
loss from previous term ¥2 million)
× Corporate tax rate 15% ＝ ¥450,000

Current term
¥2 million¥3 million

Income ¥5 million¥2 million* Corporation submitting application for blue return filing

Terminology
11

16

Under the Corporation Tax Act, loss refers to the amount that is recorded when there are more expenses (loss)
than sales (profit). It can be carried forward ten years. Loss that is incurred in one term may be offset by any
surplus (taxable income) in the following term.

  I. Taxes and tax procedures according to business structure

9 Determination of resident and non-resident classification
Individuals are categorized as residents or non-residents according to whether or not they possess adomicile in Japan, or continue to reside in Japan for more than one year. Residents are also categorized
as permanent or non-permanent according to whether they hold Japanese citizenship, or if they have
had an address or domicile in Japan for a total of 5 years within the past 10 years.
These categories are unrelated to residence status. Individuals who do not hold a resident status of“Permanent Resident” may fall into the permanent resident category for tax purposes. (See Fig. 15)
Fig. 15 Determination of Resident Status
Resident / Non-resident
Do you have an address
in Japan?

No

Permanent resident / Non-permanent resident

Yes

ResidentYes
Do you have Japanesecitizenship?

Have you had a domicile
in Japan for a consecutive
period of one year or more?

No

Yes

Permanent
Resident

No

In the past 10 years, is the total period when
you have had an address or domicile in Japan
more than 5 years?

Yes

No
Non-resident

Non-permanent Resident* Address… The core location of an individual's daily life, determined by where the center of the individual's
daily life is located
Domicile…Not the core location of the individual's daily life, but the location where the individual actuallyresides17

I. Taxes and tax procedures according to business structure  (1) Resident
Residents are those who have address in Japan, or who have resided continuously in Japan for one
year or more, and residents are categorized into permanent or non-permanent residency.
1) Non-permanent resident	Non-permanent residents are residents who do not possess Japanese citizenship but who have
had an address or residence in Japan for a period for a total of 5 years or less in the past 10 years.
Therefore, individuals with Japanese citizenship are never categorized as non-permanent
residents.
2) Permanent resident	Permanent residents are individuals other than non-permanent residents. Individuals falling into
this category are those holding Japanese citizenship and individuals who have had an address ordomicile in Japan for a period totaling more than 5 years in the past 10 years.

(2) Non-resident
Non-residents are individuals not falling into the resident category. These are individuals who do nothave an address or domicile in Japan, or who do not have an address and whose period of domicile inJapan is less than one year.

10 Range of taxable income according to resident status
The range of taxable income differs according to the resident status discussed in section 9 above(permanent resident, non-permanent resident, non-resident). (See Fig. 16)
Fig. 16 Range of Taxable Income According to Resident Status



Income category Japan source income

Resident status

Resident

Paid inJapan

Paidoverseas

Overseas source income
Paid inJapan

Permanent
Resident

Portion remitted
Portion not
to Japanremitted to Japan

TaxableNon-permanent
Resident

Non-resident

Paid overseas

Non taxable12

TaxableTaxableNon taxable

Terminology
12

Non-taxable transaction means a transaction on which consumption tax is not levied because it is far from theconcept of consumption or improper to be the subject of consumption tax according to social norms. Examples
include transfer of land, leasing houses and apartments, and medical care under the social insurance system, etc.
Non-taxed transaction means a transaction that is out of the range of consumption tax, which is supposed toapply to the transfer of property with compensation performed by a proprietor in Japan and import transactions.
Examples of non-taxed transactions are transactions arising in foreign countries, donations and gifts with nocompensation and equity dividends, etc.

18  I. Taxes and tax procedures according to business structure(1) Permanent resident
All income is taxable. Foreign nationals falling under permanent resident status are taxed for all
income including Japan-source income and overseas-source income, which is income earned
throughout the world.
Japan-source income, stated here, is income earned in Japan, such as income gained throughbusiness in Japan or salary received from a company in Japan. Income received for working in Japan,
even if paid through a parent company located overseas, is considered Japan-source income andtaxable in Japan.
Overseas-source income is income other than Japan-source income. One example of such income isincome gained through real estate in an overseas location. With overseas-source income, double
taxation may occur if income tax has already been levied overseas, but this can be avoided for certain
income amounts by claiming a foreign tax credit. However, since the tax rate and requirements for tax
credit varies by country, this process must be examined on a case-by-case basis.

(2) Non-permanent resident
Taxable income for non-permanent residents is all Japan-source income and overseas-source
income paid in Japan or remitted from overseas.

(3) Non-resident
Only Japan-source income is taxed. In such case, the method of taxation differs by type of income
and whether or not the individual possesses a permanent establishment13. Additionally, taxes may be
reduced or exempted according to the provisions of a tax treaty14 with the overseas country in somecases, so taxable income needs to be determined on a case-by-case basis.

Resident

Non-Resident

Terminology
13

There are three types of permanent establishments (PEs) in Japan; i) Branch PE such as a branch, business office,etc., ii) Construction PE that has performed construction work exceeding one year and iii) Agency PE having theauthority to store and deliver its own products and receive orders. Determination of PEs is made not based on
structure but on the actual business situation.
14
Tax treaty is a treaty entered into for transactions between Japan and any foreign country to promote investment
and economic exchanges between both countries. To be precise, it includes provisions to exclude double taxationand to prevent tax avoidance.

19II. B usiness structure for foreign-affiliatedcompanies entering Japan
1 Introduction
When a corporation is to commence business, a company is established with capital contributed byindividuals or foreign companies for the advance into Japan. The business structures of foreignaffiliated companies commencing business in Japan may be one of the following: 1) a representative
office, 2) a branch office, or 3) a local subsidiary. Local subsidiary here means a foreign-capitalized
Japanese company. A representative office is convenient in that business registration is not required;however, its business activities are limited to supplementary operations, such as correspondence tasks
and simple information collection, so it may not be favorable for foreign-affiliated companies wishingto actively expand their business in Japan. Therefore, companies that are planning the active expansionof business in Japan generally establish a branch office or local subsidiary. When foreign capital is to be
used, it is best to determine which business structure to choose by picturing, to a certain extent, whatkind of activities are initially being planned in Japan, the details of activities, what methods will betaken to procure funds and make remittances, and how large or small the business will be, among
other factors, as each business structure has its advantages and disadvantages, whether arepresentative office, branch office, or local subsidiary. Practically speaking, many companies take theform of initially operating as a representative office in the beginning soon after commencing businessin Japan and then establishing a local subsidiary at the stage where they think they can anticipate acertain amount of business.
With respect to business with non-residents, transaction procedures vary according to the countryof the paying party, the bearer of the final cost, etc., so it is necessary to verify Japan’s tax treaty, theMultilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit
Shifting (BEPS), and other relevant conventions on each business occasion (See page 30, COLUMN 2).

2 Representative offices
Representative offices do not require business registration, which means that they do not holdcorporate status. While they have the advantage of not being taxed in Japan, in principle, their businessactivities are strictly restricted, for example, to correspondence tasks and simple information collection
on behalf of the headquarters and to seeking a base for the future establishment of a branch office or
local subsidiary. In other words, representative offices may engage in supplementary and preparatory
activities only; they may not engage in sales activities in any form. It should be noted that a
representative office that engages in activities that extend beyond the above-noted limitations will beconsidered a permanent establishment and its business activities may be subject to taxation in Japan.
(See Fig. 17)20  II. Business structure for foreign-affiliated companies entering Japan

Fig. 17 Activities of Representative Offices

Overseas

Headquarters

Representative OfficeJapan

All contracts and negotiations
made between headquarters
and clients

Clients

Sales activity prohibited
Activities are restricted to correspondance tasks with the headquarters, simple
information collection, the task of seeking a base of activities as a branch office or
local subsidiary, etc.

3 Branch offices(1) Outline
Branch offices and the headquarters are considered to be the same corporate entity and are
established based on the laws of a foreign country, so they are treated as a foreign company. In thecommercial register, they are required to register as a sales office in Japan. Furthermore, branch offices
are considered an inward investment under the Foreign Exchange and Foreign Trade Act, and are
required to submit, via the Bank of Japan, advance notification or ex-post facto report to the Minister ofFinance or the ministry which has jurisdiction over the office, depending on their business type.
Taxation of branch office business activities in Japan is, as a rule, the same as Japanese companies(Domestic companies); however, there exist several issues specific to branch offices.

(2) Structure
Generally, branch office business activity involves the Buy-Sell method. Under the Buy-Sell method,in the case of wholesale and retail businesses, the branch office purchases merchandise from theheadquarters for sale directly to customers in Japan. For service businesses, the branch office provides
service to Japanese customers under the name of the branch office and expenses incurred throughthe provision of services are accounted for as costs.
When the Buy-Sell method is taken, caution is required regarding transaction prices between
headquarters and branch offices. For example, the price of purchasing goods from the headquarters isfrequently determined by adding the headquarters’ profit to the cost of manufacturing the goods inthe country where headquarters is based. However, if the profit of the branch office is negative or
extremely small as a result of the headquarters setting a high purchase price for the branch office, thetransfer pricing issue becomes a concern, and the branch office should consider whether the given
purchase price is valid or not.
Recently, transfer pricing taxation15 has begun to attract widespread attention with the OECDplaying a central role in launching a BEPS project to prevent multinational companies from going too
far to avoid payment of taxes by taking advantage of low-tax countries. (See Fig. 18)
Terminology
15

Transfer pricing taxation is a system designed to prevent tax avoidance, under which any cross-border transaction
at a transaction price divergent from the arm's length price (generally accepted transaction price) made between
multinational companies is subject to taxation with regard to the difference between the arm's length price andthe transaction price.

21

II. Business structure for foreign-affiliated companies entering Japan  Fig. 18 Structure (Buy-Sell Method)

Parent Company(Headquarters)

Overseas❸ PurchaseJapan❷ Place order❶ Accept order

Local Subsidiary(Branch Office)

Clients❹ Sell(3) Corporate image
Japanese clients tend to view local subsidiaries more favorably than they do branch offices. Credit
screening16, for example, which is often part of new-contract negotiations, especially with large
companies, tends to be much stricter for branch offices, which are considered foreign companies, thanfor local subsidiaries.

(4) Hiring employee
Local subsidiaries often have an advantage over branch offices when it comes to recruiting
employees. Companies that have established a firm position in the Japanese market after decades ofdoing business through branch offices in Japan, however, are likely to have built up an advantage inhiring.

(5) Profit and loss
When loss is incurred at a branch office, the headquarters can combine it in its accounts to reducetax burden. On the other hand, branch office profits are taxed in Japan as well as combined in theheadquarters books and taxed in the country where the headquarters is located.
In this case, a double taxation of branch office profits will occur. However, by claiming foreign tax
credit17, the headquarters might be able to eliminate the double taxation with respect to the tax that is
calculated according to the taxation system in its country in reference to the amount paid in Japan.
Nevertheless, operation of the foreign tax credit differs according to the taxation system in theheadquarters’ country, so it must be checked on each occasion.

Terminology
16

Credit screening is the assessment by financial institutions, etc. of individuals or entities regarding their repayment
capacity when lending loans to them. Screening criteria vary depending on the financial institution. In general,
determination is made based on the general business situation and performance of such individuals and/or
entities.
17
Foreign tax credit is a system introduced to prevent double taxation. Since Japan has applied the worldwide
unitary taxation system, any and all income arising in foreign countries is taxable in Japan. On the other hand, as
income arising in a foreign country is subject to taxation in such country, such income is double-taxed both in theforeign country and in Japan. In this context, the application for foreign tax credit system has been introduced toprevent such double taxation.

22  II. Business structure for foreign-affiliated companies entering Japan(6) CapitalA branch office has no capital independent of the headquarters. Operating funds are remitted fromthe headquarters for use in business activities.

(7) Corporate residence tax per capita levy
Corporate residence tax per capita levy is based on the capital of the headquarters and the numberof employees at the branch office; thus the larger the capital of the headquarters, the larger the percapita levy. The headquarters capital is determined by the middle rate (TTM ─ telegraphic transfer
middle rate) at the end of the term, converted to yen. Corporate residence tax per capita levy is taxedeven if the branch office is in loss position.

(8) Pro forma standard taxation18
If capital of the headquarters at the end of the fiscal year exceeds 100 million yen when converted toJapanese currency, tax is assessed according to the size of the business as a part of corporate enterprisetax. Specifically, tax is based on capital rate (amount of capital, etc. × 0.525%) and added value (total ofsalaries accounted for by branch offices, amount of interest paid and amount of rent paid with someadjustments × 1.26%), so a significantly high tax may result if the headquarters has a large capital at theend of the fiscal year. Since its assessment will be based on the size of business of the headquarters, tax
will be levied even if the branch office is in loss position.

(9) Debt loan
The number of commercial banks that extend loan for foreign corporations is limited, which makes it
more difficult for branch offices to obtain loans than it is for local subsidiaries. In addition, there is a
restriction for deductible expenses which are paid for loans made by the headquarters.

(10) Transfer of expenses
The headquarters and its branch offices are members of the same corporate entity, so it appears that
expenses are frequently paid on behalf of each other. If, for example, expenses paid by theheadquarters include expenses disbursed for a branch office in Japan, the portion that pertains to thebranch office in Japan can be included in the expenses of the branch office. When transferring
expenses from the headquarters to the branch office in this way, it must be done by calculating thecost of the transfer in a rational manner.

Terminology
18

Pro forma standard taxation is a kind of corporate enterprise tax system. Corporations with capital of 100 million
yen or more are subject to this tax even if they are in loss position. In particular, tax is assessed based on value
representing the size of a company such as capital as well as salaries and/or rent paid, etc.

23II. Business structure for foreign-affiliated companies entering Japan  (11) Payment by Japanese customers and tax withholdings
For real estate and consulting businesses with rental income or compensation from Japanesecustomers, 20.42% of tax withholdings and Special income tax for reconstruction may be subtracted
from the billing amount if no procedure is taken. For example, ¥795,800 is deposited on account for apayment in the amount of ¥1,000,000. This is based on the Income Tax Act, which stipulates that
20.42% of a payment must be withheld as real estate rental and consulting fees (payment for provisionof human resources) for foreign corporations.
Branch offices may submit an application for a “Certificate of Exemption from Tax Withholding for
Foreign Corporations and Non-residents” to the authorized tax office and present the approved
certificate to the Japanese customers. Branch offices must submit applications annually to the relevant
tax office. There are other forms of income that may require withholding. These should be checked inadvance.

(12) Division of profit
Profit gained at branch offices can be remitted to the headquarters as needed. This is considered atransfer of funds within a company, which does not fall into dividend distribution19 ; therefore, tax neednot be withheld at the time of remittance.

(13) Payment of salary to non-resident
When paying salary to a foreign national who has come to the branch office from the headquarters
and who is a non-resident of Japan, the salary is payment for that individual’s employment in Japan.
Therefore, as a rule, a 20.42% withholding tax and the special income tax for reconstruction arecollected when the salary is paid from the branch office to the individual, and are to be paid to the tax
authorities by the 10th day of the following month. Even if the salary were to be paid from theheadquarters, it would be construed as having been paid from the branch office, as the headquarters
and branch office are of the same corporate entity, and the branch office would need to pay thewithholding tax of 20.42% by the end of the month following the month in which the salary was paid
from the headquarters to the individual.
If the salary receiver is an individual citizen of a country that is party to a tax treaty with Japan andqualifies as a non-taxable payer for short-term stay under the treaty, withholding tax may be exempted
depending on the individual’s length of stay in Japan. In addition to length of stay, the exemption isdetermined also in consideration of the individual's nationality, employment conditions in Japan, theparty responsible for payment of salary, and other such factors.
For example, an individual employed at the headquarters of a company headquartered in China
who is assigned to a branch office in Japan on a 5-month contract and whose salary is deposited
directly into his/her account by the headquarters without involving the branch would fall under the
category of non-taxable payer for short-term stay. In this case the relevant individual's tax does notneed to be withheld in Japan.

Terminology
19

24

Dividend distribution is the distribution of profits that is gained from a corporation as a stock dividend.

  II. Business structure for foreign-affiliated companies entering Japan

4 Local subsidiaries(1) Outline
Local subsidiaries are separate corporations from their parent companies and are established underJapanese law, so they are treated as domestic companies. As such, they must register in the commercial
register as a Japanese corporation and are taxed the same as Japanese companies.

(2) Structure
Local subsidiaries generally adopt the Buy-Sell method as with branch offices. From the perspectiveof transfer pricing, local subsidiaries also need to be cautious of sales transactions with their parent
company and must examine whether the prices of purchases from the parent company are arm’s
length prices (prices that are set when conducting the same transaction with an independent third
party). As Japan has also embarked on legal reforms based on the earlier mentioned BEPS project,companies that engage in foreign-related transactions with their parent company or other relevant
company need to prepare certain documents concerning transfer pricing.
On the other hand, there are also local subsidiaries that do not engage in sales activities but are
involved in market surveys, advertising, after-sales services, and other such activities on behalf of theirparent company. Such companies that provide services to their parent company adopt the Cost-Plus
method instead of the Buy-Sell method in some cases. Under the Cost-Plus method, local subsidiaries
record sales by claiming a service fee from their parent company, where the service fee is the sum ofactivity expenses that the local subsidiary incurs in Japan and a certain percentage of profits.
Conventionally, it sufficed for local subsidiaries providing such services to their parent company to
add a profit corresponding to around 5 to 10% of expenses. Today, however, they are requested to
calculate a markup percentage (profit rate according to the transactional net margin method) taking
into consideration the profit rate of third parties engaging in similar activities. In the case of local
subsidiaries that do not provide services ancillary to their main business but engage in low valueadded operations, a markup percentage of 5% suffices (if they prepare and save their agreements andother specified documents). Low value-added operations include minor clerical work, such as the taskof billing the parent company costs that have been paid in Japan on behalf of the parent company. Itshould be noted that they do not include services, research and development, manufacturing, sales,
physical distribution, marketing, and financial activities that are ancillary to the main line of business.
(See Fig. 19)
Fig. 19 Structure (Cost-Plus Method)

Overseas

Parent Company
Payment of service fee

Japan

Local Subsidiary

All contracts and negotiations
made between headquarters and clients

Clients

Sales activity prohibited
Activities are restricted to minor clerical work, such as the task of billing the parent
company, and do not include R&D, manufacturing, sales, marketing, or financial activities.

25

II. Business structure for foreign-affiliated companies entering Japan  (3) Corporate image
Japanese clients tend to see local subsidiaries more favorably than they do branch offices. For credit
screening, subsidiaries are treated in the same way as other local companies are, and there is no
disadvantage in being a foreign-affiliated company in terms of screening.

(4) Hiring employees
Subsidiaries have a greater advantage than branch offices when it comes to recruiting employees.

(5) Profit and loss
When loss is incurred by local subsidiaries, the loss cannot be combined in the parent company's
accounts. On the other hand, when they gain a profit, they pay tax in Japan, but the tax they pay
cannot be reflected onto the parent company's accounts. Thus, double taxation cannot be avoided byusing the foreign tax credit system.

(6) Capital
Under Japan's Companies Act, it is possible to establish a subsidiary with capital of 1 yen. However,until profit from sales can be gained, it is desirable to hold several million yen as operating funds.

(7) Corporate residence tax per capita levy
This tax is based on the capital of the local subsidiary and the number of employees. Companies
with capital of 10 million yen or less and 50 or fewer employees may hold the tax to the minimum of
70,000 yen per year. The per capita portion of corporate residence tax is levied even when local
subsidiaries are in loss position.

(8) Pro forma standard taxation
This is not taxable if the capital of local subsidiary is 100 million or less. Parent company capital isirrelevant.

(9) Debt loan
Local subsidiaries are treated the same as Japanese companies; therefore, it is relatively easier for
local subsidiaries to receive loans from banks compared with branch offices. Interest on loans from aparent company can be accounted as expenses for local subsidiaries. However, caution is required, as
they may be subject to thin capitalization taxation20 (a system that limits the deductibility of interest
paid for the portion of loans in amounts exceeding three times the amount of capital, etc.) or toearnings stripping rules21 (a system that limits the deductibility of the portion of net interest expenses
subject to earnings stripping rules that exceed a certain ratio of adjusted income amount).
Terminology
20

Thin capitalization taxation is a rule introduced to prevent tax avoidance, which limits the deductibility of interest
expenses in certain cases where, for example, a Japanese subsidiary of a foreign company, which is in need offunds, takes out a loan from the parent company overseas instead of receiving investment from it.
21
Earnings stripping rules comprise a taxation system that has been stipulated for the purpose of preventing tax
avoidance. They place certain restrictions on acts by corporations to decrease income by paying excessive
amounts of interest compared to their income.

26  II. Business structure for foreign-affiliated companies entering Japan(10) Transfer of expenses
It is possible for the parent company to handle payment due to local subsidiaries; however, suchpayment must be settled at a later date. If settlement is neglected, there will be a risk that suchpayment will be considered as donated profit and seen as taxable income by the tax authorities. The
same is true for local subsidiaries that make payments on behalf of the parent company which they failto settle at a later date; namely, the amount will be considered as a donation and cannot be included
as expenses.
Additionally, management expenses and other such expenses incurred by the parent company arein some cases transferred to its worldwide subsidiaries and affiliated companies. When doing so,
however, it is necessary to prove that the amount to be transferred is a rational amount. For example, itis necessary to prepare not only a contract, but also the breakdown of the expenses to be transferred,
the basis for calculation of the amount to be transferred, and the actual deliverables of the service
provided, among others. When considering that the parent company is a separate entity, the transfer of
expenses requires careful discretion.

(11) Payment by Japanese customers and tax withholdings
The entire invoiced amount of real estate rental and consultation fees will be deposited into theaccount. Unlike with branch offices, taxes are not withheld at the source.

(12) Division of profit
When profit earned by local subsidiaries is remitted to a parent company, such deposit is seen as adividend and, as a rule, 20.42% of the dividend is withheld as tax (income tax and special income tax forreconstruction). In the case where the receiver of the dividend is a corporation in a country that has a
tax treaty with Japan and has submitted an “Application Form for Income Tax Convention” to therelevant tax office by the day before the payment of the dividend, the amount of withholding tax may
be reduced or exempted. For example, if the parent company (a US corporation) wholly owns the local
subsidiary and satisfies certain requirements, withholding tax involving dividend to the US corporation
will be exempted according to the Japan-U.S. Tax Treaty. When withholding tax is exempted, an“Attachment Form for Limitation of Benefits” must be submitted in addition to the “Application Form for
Income Tax Convention” and other documents such as the tax residency certificate of the company
receiving the dividend. Dividend payment is remitted upon approval at the shareholder's meeting.

(13) Payment of salary to non-resident
As a rule, 20.42% of tax withholdings and special income tax for reconstruction must be subtracted
from salaries paid to non-resident employees working in Japan. However, if the salary is paid to theemployee by the parent company, unlike branch offices, local subsidiaries need not withhold 20.42%
tax.
If the salary receiver is an individual citizen of a country that is party to a tax treaty with Japan andqualifies as a non-taxable payer for short-term stay under the treaty, withholding tax may be exempted
depending on the individual’s length of stay in Japan. In addition to length of stay, the exemption isdetermined also in consideration of the individual's nationality, employment conditions in Japan, theparty responsible for payment of salary, and other such factors.
For example, an individual employed at the parent company of a company headquartered in China
who is assigned to a subsidiary in Japan on a 5-month contract and whose salary is deposited directly
into his/her account by the parent company without involving the subsidiary would fall under the
category of non-taxable payer for short-term stay. In this case the relevant individual's tax does notneed to be withheld in Japan.
27

II. Business structure for foreign-affiliated companies entering Japan  

5 Summary
Points described in II. 2～4 are listed below:*In the case of a company with capital of less than 500 million yen and a local subsidiary with capital of
10 million yen.
Branch office28

Local subsidiary

Legal status

Foreign corporation

Japanese corporation

Structure

Buy-Sell method

Buy-Sell method andCost-Plus method

Corporate image

More difficult to be accepted thana local subsidiary

Easier to be accepted
than a branch officeHiring employees

More difficult than a local
subsidiary

Easier than a branch office

Profit gained at branch
office or subsidiary

Taxed in Japan, and to
be combined with theheadquarters accounts
Double taxation may be avoided
by claiming a foreign tax credit

Taxed only in Japan
Foreign tax credit not necessary

Loss incurred at branch
office or subsidiary

Able to combine withthe headquarters accounts

Unable to combine with parent
company accounts

CapitalCapital of the headquarters

From 1 yen

Corporate residence tax
per capita levy

Affected by the headquarters
capitalAccording to capital

Pro forma standard
taxation

Subject to taxation if the
Subject to taxation if the local
headquarters' capital is 100 million subsidiary’s capital is 100 million
yen or higher
yen or higher

Debt loans

More difficult to obtain loans thana local subsidiary

Easier to obtain loan
than a branch officeTransfer of expenses

Requires a rational basis of
calculation

Requires a rational basis of
calculation

Payments by Japanesecustomers and tax
withholding

Tax may be withheld

Tax not withheld

Division of profits

Possible to remit tothe headquarters as needed

Remit as dividend(in some cases tax withholding isrequired)

Payment of salary tonon- resident

20.42% tax withholding may berequired by a branch office

No need to withhold tax
by a local subsidiary  II. Business structure for foreign-affiliated companies entering Japan

6 Conclusion
Foreign-capital companies may advance into Japan in the form of representative offices, branch
offices or local subsidiaries, all of which having advantages and disadvantages. Companies should
determine which form to adopt after giving careful consideration to the kind and content of businessactivities the company wishes to conduct, fund procurement and remittance method, range ofbusiness negotiations, etc. It is most common for foreign-capital companies to begin withrepresentative offices then establish a local subsidiary when the potential for business becomes clearer.
The handling of business with non-residents differs depending on the country of the client and theparty shouldering the final expense, so the tax treaty of the relevant country needs to be checked foreach transaction.

29

II. Business structure for foreign-affiliated companies entering Japan  

COLUMN1

Elimination of seals on national tax documents
Conventionally, tax returns and tax documents to be submitted to the National Tax Bureau
or other authority were required to be stamped with the seal of the submitting party.
However, under the tax revision of 2021, seals have become no longer needed on
administrative documents from April 1, 2021, with the exclusion of certain documents thatstill require seals. To foreign companies that used to require time to obtain the signature andseal of a representative residing overseas, this change has made it possible to process
documents more quickly.
National Tax Agency: On the handling of seals at customer service counters in tax offices
https://www.nta.go.jp/information/other/data/r02/oin/index.htm

COLUMN

2
What is BEPS ?

Recently, the OECD has played a central role in launching a BEPS (Base Erosion and Profit
Shifting) project to prevent multinational companies from going too far to avoid payment oftaxes by taking advantage of low-tax countries. Under the project, a 15-point action plan has
been announced to address the issue of intentional tax avoidance in cross-bordertransactions, such as by reviewing the definition of permanent facilities and documenting
the corporation information of multinational companies.
See the URL below for details.
Ministry of Finance: Materials concerning the Multilateral Convention to Implement Tax
Treaty Related Measures to Prevent Base Erosion and Profit Shifting (BEPS)
https://www.mof.go.jp/tax_policy/summary/international/tax_convention/mli.htm
National Tax Agency: BEPS Project
https://www.nta.go.jp/taxes/shiraberu/kokusai/beps/index.htm

COLUMN

3
Customs clearance taxes

Products imported from overseas and brought into Japan must be cleared at customs.
Customs clearance involves two types of taxes: import consumption tax and custom duty.
Import consumption tax is the taxable value of the product at the time of customs clearance
multiplied by the consumption tax rate (standard rate: 10%; reduced rate: 8%). The taxable
value of the product at the time of customs clearance refers, as a rule, to the price actually
paid or payable (transaction value) plus the cost of transport to the import port, insurance,
and additional fees such as intermediate fees borne by the buyer to import the goods andfees required for the package or packaging of the import goods.
The applicable rate of customs duties is determined by the type of import goods based on
the Customs Tariff Act. However, a simplified customs duty rate separate from the standard
rate may be applied to general import goods that have a total taxable value of less than
200,000 yen.
Refer to the “Customs Answer (FAQ)”.
Japan Customs: Simplified tariff applicable to goods at a total value of 200,000 yen or less(general import freight and international parcel post)
https://www.customs.go.jp/tetsuzuki/c-answer/imtsukan/1001_jr.htm
https://www.customs.go.jp/english/c-answer_e/imtsukan/1001_e.htm

30III. Reference
Appendix: Japan's Tax Convention Network
Ministry of Finance Japan《84 conventions, etc. applicable to 151 jurisdictions; as of February 1, 2023》(see notes 1 and 2)
Europe (46)
Iceland
IrelandUK
Italy
Esthonia
Austria
Netherlands
Croatia
Switzerland
SwedenSpain

Slovakia
Slovenia
SerbiaCzech Republic
Denmark
Germany
NorwayHungary
FinlandFranceBulgaria

America and the Caribbean (35)Belgium
Portugal
PolandLatviaLithuania
Luxemburg
Romania
Guernsey（*）
Jersey（*）
Isle of Man（*）
Liechtenstein（*）

Russia andNew Independent States (12)Azerbaijan
Armenia
UkraineUzbekistan
Kazakhstan
KyrgyzGeorgia
Tajikistan
Turkmenistan
Belarus
Moldova
Russia(No bilateral convention with Japan)

Albania
AndorraNorth Macedonia
CyprusGreeceGreenland Malta
San Marino MonacoMontenegro
Gibraltar
Faeroe Islands
Bosnia and Herzegovina

United States
Uruguay
EcuadorCanadaJamaica

British Virgin Islands（*）
Panama（*）
Bahamas（*）
Bermuda（*）
Colombia

Chile
BrazilPeru
MexicoCayman Islands（*）(No bilateral convention with Japan)

Anguilla
Antigua and Barbuda
Aruba
Argentina
Barbados
BelizeCosta Rica

Paraguay
Saint Christopher and Nevis
Saint Lucia
Sint Maarten
Saint Vincent and the Grenadines

CuracaoDominica
Dominican Republic
El Salvador
GrenadaGuatemalaMontserrat

Tax conventions
Tax information exchange agreements
Convention on Mutual Administrative Assistancein Tax Matters (No bilateral convention)
Private-sector tax arrangement with Taiwan

Africa (20)Middle East (10)Asia and Pacific (28)

Egypt

United Arab Emirates Kuwait
Saudi Arabia
IsraelTurkey
Oman
Qatar

India
Indonesia
Australia
Korea
Singapore
Sri Lanka
ThailandZambia South Africa Morocco(No bilateral convention with Japan)

Botswana
Mauritius
Cabo Verde
Namibia
Cameroon
Nigeria

Eswatini
RwandaGhana
Senegal
Kenya
Seychelles

Liberia
Tunisia
Mauritania
Uganda(No bilateral convention with Japan)

BahrainJordanLebanonChina
New ZealandPakistan
Bangladesh
FijiPhilippines
BruneiVietnamHong Kong
Malaysia
Samoa（*）
Macao（*）
Taiwan（see note 3）(No bilateral convention with Japan)

Cook Islands New Caledonia Maldives
Nauru
VanuatuMongolia
Niue
Marshall Islands(Note 1) Since the Convention on Mutual Administrative Assistance in Tax Matters is a multilateral convention, and the tax conventions with the former Soviet
Union and with the former Czechoslovakia were succeeded by more than one jurisdiction, the numbers of jurisdictions do not correspond to those oftax conventions, etc.
(Note 2) The breakdown of the numbers of conventions, etc. and jurisdictions is as follows:•Tax convention (a convention principally for the elimination of double taxation and the prevention of tax evasion and avoidance); 71 conventions
applicable to 79 jurisdictions.
•Tax information exchange agreement (a convention principally for the exchange of information regarding tax matters); 11 conventions applicable to
11 jurisdictions (These jurisdictions are marked with (*) above).
•Convention on Mutual Administrative Assistance in Tax Matters; Entered into force by 120 jurisdictions (not including Japan) (These jurisdictions areunderlined above) and applicable to 138 jurisdictions due to the extension of the application of the Convention (Jurisdictions to which theConvention is extended are underlined above with dotted lines). 60 jurisdictions out of 138 do not have a bilateral convention with Japan.
•Private-sector tax arrangement with Taiwan; 1 jurisdiction(Note 3) As for Taiwan, a framework equivalent to a tax convention is established in combination of (1) a private-sector tax arrangement between theInterchange Association (Japan) and the Association of East Asian Relations (Taiwan) and (2) Japanese domestic legislation to implement theprovisions of the private-sector tax arrangement in Japan. (The two associations are now named Japan-Taiwan Exchange Association (Japan) andTaiwan-Japan Relations Association (Taiwan), respectively.)

Ministry of Finance: Japan's Tax Convention Networkhttps://www.mof.go.jp/english/policy/tax_policy/tax_conventions/international_182.htm
31

III. Reference  Inquiries related to taxes
OutlineLaws and procedures
for national taxes, etc.

Forms for national taxes

Tax information desk

Laws and procedures
for local taxes, etc.

Institutes/Organizations

URL

National Tax Agency

https://www.nta.go.jp/

National Tax Agency

https://www.nta.go.jp/taxes/
tetsuzuki/index.htm

National Tax Agency site (w/English
explanations)

https://www.nta.go.jp/english/
index.htm

National Tax Agency Regional
Offices

https://www.nta.go.jp/english/
contact/moreinformation/

National Tax Agency Regional
Offices(w/English)

https://www.nta.go.jp/taxes/
shiraberu/sodan/denwa-sodan/
index.htm

Bureau of Taxation at each
Prefectural Government(The Tokyo Metropolitan
Government Bureau of Taxation)

https://www.tax.metro.tokyo.lg.jp/

Contact Information for Starting Business
I. Public support agencies and organizations●Regional Head Offices of the Organization for Small & Medium Enterprises and Regional

Innovation, Japan
Eligibility: Entrepreneurs, small and medium-sized enterprises who are taking a new step
Services: Dispatch of experts, business startup consultation, provision of information on incubation
facilities, etc.
Location: 10 locations nationwide
Inquiries: https://www.smrj.go.jp/regional_hq/index.html
https://www.smrj.go.jp/english/about/network.html
https://www.smrj.go.jp/venture/index.html
https://www.smrj.go.jp/english/activities/●Prefectural Small and Medium Enterprise Support Centers

Eligibility: S mall and medium-sized enterprises who want to have business or financing consultations
Services: Business diagnosis, dispatch of experts, etc.
Location: All prefectures and ordinance-designated cities
Inquiries: “Local Support Centers”
https://zenkyo.or.jp/association/

32

  III. Reference●Startup Support Center, Tokyo Chamber of Commerce and Industry

Eligibility: Small and medium-sized enterprises who have issues related to startup, businesssuccession, new business development, and financing
Services: Consultations on issues at the time of business startup, such as procedures for starting abusiness, and the public loan system that can be used at the time of startup
Location: Marunouchi Nijubashi Building, 3-2-2 Marunouchi, Chiyoda-ku, Tokyo 100-0005
Inquiries: TCCI Business Support Desk
TEL. 03-3283-7767
https://www.tokyo-cci.or.jp/entre/	https://www.tokyo-cci.or.jp/english/our_main_missions_and_commitments/business_
support/●Mirasapo plus

Eligibility: Small and medium-sized enterprises and small-scale enterprises, etc.
Services: Introduction of “support systems,” such as subsidies, grants, benefits, loans, and tax breaks
Inquiries: “The Small and Medium Enterprise Agency”
TEL. 03-3501-1511 (Main number)
https://mirasapo-plus.go.jp●Small and Medium Enterprises 119

Eligibility: Small and medium-sized enterprises and small-scale enterprises, etc.
Relevant services: Introduction of appropriate support organizations for problem solving
Inquiries: “Secretariat for Dispatch of Experts”
TEL. 03-5542-1685
https://chusho119.go.jp/
Remarks: Operation entrusted by Small and Medium Enterprise Agency●Japan Finance Corporation (JFC)

Eligibility: Founding entrepreneur, etc.
Services: Consultations on starting a business, support for loans to startup companies withdifficulty in raising funds, etc.
Locations: General Support Desk (152 locations nationwide), Business Startup Support Center (15locations nationwide), Business Support Plaza (6 locations nationwide), etc.
Inquiries: “General Business Startup Support”
https://www.jfc.go.jp/n/company/national/initiation.html
https://www.jfc.go.jp/n/english/“Business Support Plaza”
https://www.jfc.go.jp/n/finance/sougyou/ijuusougyou/location/index.html“Enterprise Fund Consultation Dial”
TEL. 0120-154-505
https://www.jfc.go.jp/n/inquiry/33

III. Reference  ●Japan Federation of Credit Guarantee Corporations (JFG)

Eligibility: Small and medium-sized enterprises and small-scale enterprises
Services: Acting as a guarantor of loans to make it easier for companies to obtain businessfinancing from financial institutions
Location: 2-1 Kandatsukasacho, Chiyoda-ku, Tokyo 101-0048
Inquiries: https://www.zenshinhoren.or.jp
https://www.zenshinhoren.or.jp/english/“List of Credit Guarantee Associations in Japan”
https://www.zenshinhoren.or.jp/nearest/●Tokyo One-Stop Business Establishment Center (TOSBEC)

Eligibility: Those considering opening a business in Tokyo
Services: Various procedures such as certification of the articles of incorporation, registration,
taxation, pension, social insurance, and immigration management, which are necessary
for incorporating a corporation or start a business
Location: Japan External Trade Organization (JETRO) Headquarters
Ark Mori Bldg. 7F, 1-12-32 Akasaka, Minato-ku, Tokyo 107-6090
Inquiries: TEL. 03-3582-4934
https://www.startup-support.metro.tokyo.lg.jp/onestop/jp/
https://www.startup-support.metro.tokyo.lg.jp/onestop/en/●Japan External Trade Organization (JETRO)

Eligibility: Those considering overseas business
Services: Export/import and investment advice (such as trade promotion methods, overseas
market information, and investment-related information)
Location: Ark Mori Bldg. 1-12-32 Akasaka, Minato-ku, Tokyo 107-6006
Inquiries: “JETRO General Information”
TEL. 03-3582-5511
https://www.jetro.go.jp/
https://www.jetro.go.jp/en/“JETRO Domestic Offices”
https://www.jetro.go.jp/jetro/japan/list.html
https://www.jetro.go.jp/en/jetro/worldwide/japan/●Manufactured Imports and Investment Promotion Organization (MIPRO)

Eligibility: Those considering starting a business
Services: Consultation on procedures for establishing and starting a company, etc.
Location: World Import Mart Bldg. 6th Floor, 3-1-3 Higashi Ikebukuro, Toshima-ku, Tokyo 170-8630
Inquiries: "Consulting Services"
TEL. 03-3989-5151
https://www.mipro.or.jp/advisement/
https://www.mipro.or.jp/english/advisement/index.html

34  III. Reference

II. Professional Associations●Japan Federation of Certified Administrative Procedures Legal Specialists Associations(Administrative Attorney)
Services: Consultations on obtaining various types of licenses and approvals, such as application
for Certificate of Eligibility, application for change of status of residence, and application
for business permission, etc., and creation of articles of incorporation
Location: Toranomon Towers Office 10th Floor, 4-1-28 Toranomon, Minato-ku, Tokyo 105-0001
Inquiries: “Japan Federation of Certified Administrative Procedures Legal Specialists Associations”
TEL. 03-6435-7330
https://www.gyosei.or.jp/
https://www.gyosei.or.jp/about/language/english“Prefectural Association of Certified Administrative Procedures Legal Specialists”
https://www.gyosei.or.jp/about/disclosure/membership.html●Japan Federation of Shiho-Shoshi Lawyer’s Associations (Solicitor)

Services: Consultation on registration, acting as agent for registration procedures, etc.
Location: 4-37 Yotsuya Honshio-cho, Shinjuku-ku, Tokyo 160-0003
Inquiries: TEL. 03-3359-4171
https://www.shiho-shoshi.jp/
https://www.shiho-shoshi.jp/global/english/“List of Shiho-shoshi Associations in Japan”
https://www.shiho-shoshi.or.jp/association/shiho_shoshi_listh/“List of Shiho-shoshi General Consultation Center”
https://www.shiho-shoshi.or.jp/activity/consultation/center_list/●Japan Federation of Certified Public Tax Accountants’ Associations			

(Certified Public Tax Accountant)Services: Tax consultations, acting as agent to prepare tax documents including tax returns, etc.
Location: Nihon Zeirishi Kaikan Bldg. 8F, 1-11-8 Osaki, Shinagawa-ku, Tokyo 141-0032
Inquiries: TEL. 03-5435-0931
https://www.nichizeiren.or.jp/
https://www.nichizeiren.or.jp/eng/“List of Certified Public Tax Accountants’ Associations in Japan”
https://www.zeirishikensaku.jp/
https://www.nichizeiren.or.jp/eng/region.html

35

III. Reference  ●Japan Federation of Labor and Social Security Attorney’s Associations			

(Labor and Social Security Attorney)
Services: Procedures for labor and social insurance, labor management consultation, pension
consultation, etc.
Location: Shakai Hokenromushi Kaikan Bldg., 3-2-12					Nihonbashi Hongoku-cho, Chuo-ku, Tokyo 103-8346
Inquiries: TEL. 03-6225-4864 (Main number)
https://www.shakaihokenroumushi.jp/
https://www.shakaihokenroumushi.jp/en/tabid/296/Default.aspx“List of Labor and Social Security Attorney’s Associations in Japan”
https://www.shakaihokenroumushi.jp/organization/tabid/238/Default.aspx●Japan Small and Medium Enterprise Management Consultant Association		

(Small and Medium Enterprise Management Consultant)Services: Provision of management diagnosis and management advice to small and medium
enterprises, etc.
Location: Ginmatsu Bldg., 1-14-11 Ginza, Chuo-ku, Tokyo 104-0061
Inquiries: TEL. 03-3563-0851
https://www.j-smeca.jp/
https://www.j-smeca.jp/contents/018_english_contents.html“List of Prefectural Small and Medium Enterprise Management Consultant Association”
https://www.j-smeca.jp/open/static/sibuindex.jsf●Japan Federation of Bar Associations (Attorney)

Services: Legal consultation, legal services such as settlement and out-of-court negotiations,litigation activities, and appeals to administrative agencies. etc.
Location: Bengoshi Kaikan Bldg. 15F, 1-1-3 Kasumigaseki, Chiyoda-ku, Tokyo 100-0013
Inquiries: TEL. 03-3580-9841 (Main number)
https://www.nichibenren.or.jp/
https://www.nichibenren.or.jp/en.html“Himawari Hotline (Dedicated contact for SME managers)”
TEL. 0570-001-240“Himawari SME Center”
https://www.nichibenren.or.jp/ja/sme/about_himawari.html“Online Consultation Office”
https://www.nichibenren.or.jp/ja/sme/contact.html“Local Bar Associations“
https://www.nichibenren.or.jp/en/legalinfo/legal.html“Legal Consultation for Foreigners“
https://www.nichibenren.or.jp/en/legalinfo/counceling.html

36

Trade and Business Startup Consultation Desk

MIPRO Consulting services for trade & starting business
TEL: 03-3989-5151
https://www.mipro.or.jp/
Consultation available weekdays from 10:30 A.M. to 4:30 P.M.

This document has been prepared based on the information as of April 30, 2022 and with the utmost careregarding accuracy. However, when actually starting a business in Japan, please inquire with the relevant public
offices concerning necessary documents, matters, etc. or consult with a certified tax accountant or otherspecialists.
MIPRO shall not be liable for any direct or indirect damage arising from the use of information and othermaterials presented in this document.

*Unauthorized reproduction of this document is prohibited.

This material has been prepared by receiving subsidies for FY2022 Promotion Business Expenses fromthe Foundation for International Trade and Industrial Co-operation, a general incorporated foundation.

Manufactured Imports and Investment Promotion Organization (MIPRO)
6th Floor, World Import Mart Bldg., 3-1-3, Higashi-Ikebukuro, Toshima-ku, Tokyo 170-8630, Japan
TEL.03（3971）6571 FAX.03（3590）7585
URL：https://www.mipro.or.jp/

外国人のための起業ガイドブック（税務解説編）