accounting and tax system in japan. ceo ／ yasunari kuno & company profile ceo/ yasunari kuno -...
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Accounting and Tax system in Japan
CEO ／ Yasunari Kuno & Company Profile
CEO/ Yasunari Kuno - Japanese CPA- 1965 Born in Aichi Prefecture 1989 Graduated from Shiga University (Economic Dep.) 1990 Entered Price Waterhouse (Audit Dep.) 1998 Established Yasunari Kuno CPA Firm 2007 Tokyo Consulting Firm Co, Ltd.
Company Profile Head Office: Tokyo (Tokyo Consulting Firm Co, Ltd.) Branch: Yokohama, Nagoya, Osaka, Fukuoka Subsidiaries: Tokyo Consulting Firm (Hong Kong) Co, Ltd Tokyo Consulting Firm Private Ltd.(New Delhi) Total Staff: 425
Ⓒ 2007 Tokyo Consulting Firm Private., Ltd. All rights reserved
Accounting Regulation
“Triangle System”in the accounting system
1. The Corporation Law 2. Corporation Tax Law 3. Financial Instruments and Exchange Law
Ⓒ 2007 Tokyo Consulting Firm Private., Ltd. All rights reserved
LawCorporation Law
Corporation Tax Law
Financial Instruments and Exchange Law
AuthoritiesMinistry of Justice
National Tax Agency
Financial Services Agency
Purpose
Protect the interests of shareholders and creditors
Fairness and certainty of taxation
Protect the interests of investors
ScopeCompanies Companies Listed
Companies
Accounting system
Ⓒ 2007 Tokyo Consulting Firm Private., Ltd. All rights reserved
Some instruction for Incorporation in Japan
The minimum paid capital is one Japanese Yen
One promoter, One shareholder, One Director are required and one director has to have certificates of residence and a seal impression.
No discrepancy on Tax ratio between Foreign company and Japanese company in Japan.
No benefit rule for Foreign Direct Investment
Ⓒ 2007 Tokyo Consulting Firm Private., Ltd. All rights reserved 5
6 Ⓒ 2007 Tokyo Consulting Firm Private., Ltd. All rights reserved 6
Some main taxation in India and Japan
Central Tax Local Tax
India Japan India Japan
Direct Tax
Income Tax(individual, corporation)Minimum Alternate Tax
Fringe benefit tax
Corporation TaxIncome TaxWithholding Income TaxInheritance TaxGift Tax
Business TaxInhabitation Tax
Indirect Tax
Excise DutyCustoms DutyService TaxCentral Sales Tax
Consumption Tax
Local Sales TaxValue Added TaxStamp DutyEntry Tax
Consumption Tax
Taxations on Companies and Individuals in Japan Major taxes
Company1. Corporation tax (法人税) – National2. Business tax (事業税) – Local3. Inhabitant tax (都道府県民税等) – Local4. Consumption tax (消費税等) – National & Local5. Withholding Income tax (源泉所得税) – National
Individual1. Income tax (所得税) – National2. Business tax (事業税) – Local3. Inhabitant tax (都道府県民税等 ) – Local4. Consumption tax (消費税等) – National & Local5. Inheritance tax (相続税) – National6. Gift tax (贈与税) - National
Corporation Tax Rates in Japan
Tax Rates1. Corporation tax: 30% of taxable income2. Business tax: 9.6% of taxable income3. Inhabitant tax: 20.7% of the
corporation tax(+ Per Capital Tax (70,000yen-))
↓Effective Rate about 40%
Corporation Tax Return and Tax payment
Interim tax return and interim tax payment
File and pay within two months from the end of the sixth month of the fiscal year
Final Tax Return and final tax payment
File and pay within two months from the end of the fiscal year. (One month extension can be made for the filing due to audit etc.)
Corporation Tax loss carry forward
Loss carry forward
Loss carry forward (taxable loss) will be expired after 7 years
Tax Treaty between in India and Japan
India-Japan Tax Treaty rate:
Dividend Interest Royalty Technical Service
10% 10% 10% 10%
Foreign tax credit:Japanese corporations which pay foreign national or local taxes based on income may take a credit against Japanese corporation tax subject under the foreign tax credit rules.
Tax Treaty:Tax treaty has been concluded between 55 countries.
Transfer Pricing
Transaction between foreign related companies will be subjected to Japanese transfer pricing taxation.
Withholding Tax
A company has necessity to withhold income tax for the payment of salary, professional fee, etc.
Individual Income Tax
Income tax rate0-1,949,000yen: 5%1,950,000yen – 3,299,000yen 10%3,300,000yen – 6,949,000yen 20%6,950,000yen – 8,999,000yen 23%9,000,000yen – 17,999,000yen 33%18,000,000yen - 40%
Inhabitant tax rate 10%
Individual Income Tax
Source of income subject to taxation1. Non-resident:
Income in sources of Japan
2. Resident Non-permanent resident:(A resident taxpayer of non-Japanese nationality
who has had domicile or residence in Japan for an aggregate period of five years or less within the last ten years.)
Income in sources of Japan: TaxableIncome from sources in abroad: Paid in Japan – Taxable Paid in Abroad – Remitted to Japan is
taxable Permanent resident: All income is taxable
Individual Income Tax
Schedule of tax return and tax payment
1. Estimated income tax prepayment Paid between July 1st – July 31st
Paid between November 1st – November 31st
2. Final Tax Return and final tax payment File and pay by 15th March for the prior
calendar year
Consumption Tax
1. Tax rate: 5% (National tax 4% and Local tax
1%)1. Tax payer
Company and individual which transfers property or provides services in Japan in return for payment
Company and individual who removes foreign goods from a bonded area.
It is not necessary for a taxpayer to have a residence or domicile in Japan in order to be subject to the Consumption tax.
Consumption Tax
* Schedule of tax return and tax payment
1. Interim tax return and interim tax payment
Tax payer must file interim tax returns and make interim tax payments if the amount of Consumption tax on their return for the prior year exceeds certain limits.
2. Final Tax Return and final tax payment (refund)
Tax payer must file and pay within two months after the end of tax periods.
(Generally refund will be made within two months after the filing)