202010.23
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  • ● Necessary Reports to Tax Office etc. in connection with the establishment of a Corporation in Japan
    1. Report of Establishment of Corporation (National Tax, Local Tax)
      • local-tax

        Reports regarding the establishment of the corporation (including the Japanese subsidiaries of foreign companies) must submitted to the competent tax office (national tax) and prefectural/ward/municipal tax offices (local tax).

      • Deadline: Within 2 months after the date of establishment (date of registration of establishment)
    2. Report for becoming a Foreign Corporation
      • This must be reported to the competent tax office when becoming a foreign corporation with permanent establishment (PE) in Japan, or when the foreign corporation receives the rent in Japan, even if that foreign corporation does not have PE in Japan etc.
      • Deadline: Within 2 months after the date of becoming a foreign corporation
    3. Application for Filing Blue Form Tax Return
      • Corporations (including Japanese subsidiaries of foreign companies, foreign corporations and Japanese branches of foreign corporations) can file a blue-form tax return for corporate tax purposes and receive various benefits by keeping certain accounting records. To file a blue-form tax return, an application must be submitted to the competent tax office for approval.
      • Blue-form filers enjoy many benefits, primarily:
        ① Tax loss carryforward: Tax losses can be carried forward for up to 10 years and offset against taxable income in the current period.
        ② Special provisions for small depreciable assets for SMEs: If a blue-form filer acquires a depreciable asset with a purchase price of up to 300,000 yen (usually 100,000 yen), the entire acquisition amount is deductible in the fiscal year in which the asset was acquired.
        ③ Tax credit: Blue-form filers may be eligible for various tax credits
      • Deadline: 3 months after establishment or the last day of the first fiscal year of establishment, whichever is sooner
    4. Application for Extension of the Due Date for Filing a Tax Return (National Tax / Local Tax)
      • filing-tax-return

        If there’s a valid reason why the final tax return cannot be submitted within the normal due date (within two months after the fiscal year end), such as the annual shareholders’ meeting being held within three months after the fiscal year end, an extension may be granted upon submitting an application to the competent tax office (national tax) and the prefectural/ward/municipal tax office (local tax).

      • Deadline: The end of the relevant fiscal year
    5. Commencement of Salary Payment
      • When a company becomes a withholding agent, such as when they hire an employee and start paying him/her a salary, and/or paying professionals (attorneys, certified tax accountants etc.) the fees, the company must notify the competent tax office.
      • Deadline: Within one month from becoming a withholding agent
    6. Application for Semi-annual Payment of Withholding Income Tax
      • In principle, the payment due date for withholding income tax is the 10th day of the month following the payment date of salaries, fees etc. However, corporations with less than 10 employees may submit this application. If approved, their due dates will be adjusted to the following schedule:
        ① Withheld income tax on salaries, fees paid from January to June: July 10
        ② Withheld income tax on salaries, fees paid from July to December: January 20 of the following year
      • Note that only salaries, retirement allowances, and professional fees (such as attorney fees, certified tax accountant fees) paid to residents are applied to the semi-annual payment. Other payments (such as manuscript fees, royalties paid to non-residents, etc.) are still due on the 10th day of the following month.
      • Deadline: None, applicable to salaries, fees etc. paid in the months following the date of submission (e.g. For applications submitted in August, the semi-annual payment will apply from salaries paid in September onwards.)
    7. Application for Valuation Method of Inventories
      • Inventories are generally valued using the last purchase price method; if a corporation prefers to use other specific valuation method, the corporation must notify the competent tax office.
      • Deadline: Due date for filing the corporate tax return for the first fiscal year of establishment
    8. Application for Depreciation Method of Fixed Assets
      • corporation-assets

        In principle, the depreciation method for depreciable assets depends on the type of asset. If a corporation prefers to use other specific depreciation method, the corporation must notify the competent tax office.

      • Deadline: Due date for filing the corporate tax return for the first fiscal year of establishment
    9. Application for Election of Consumption Taxable Person
      • Newly established corporation stated capital at the beginning of the fiscal year is less than JPY 10 million is not the consumption taxable person during the first and second fiscal years. However, if the company has export-exempt sales and other potential refunds, it may submit this application to become a consumption taxable person.
        Note that an election is irrevocable generally for a period of 2 years.
      • Deadline: The day before the first day of the applicable taxable period (In the case of the first taxable period of establishment, by the end of the first taxable period.)
    10. Application for the Election of the Simplified Tax Credit System for Consumption Tax
      • In principle, the consumption tax is calculated based on the net of the amount of consumption tax received on taxable sales and the amount of consumption tax paid on taxable purchases (general taxation method).
      • As an exception, a simplified tax credit system is applicable to corporations the annualized value of whose taxable sales for the base period was JPY 50 million or less. Under the simplified tax credit system, the tax payable is calculated based on the consumption tax received and the assumed profit margin depending on the corporation’s business type.
      • The taxable persons must submit an appropriate report to the competent tax office in order to utilize this method and once applied, this method must be put to use for at least 2 years.
      • Deadline: The day before the first day of the applicable taxable period (In the case of the first taxable period of establishment, by the end of the first taxable period.)