One-Stop Center supports foreign-affiliated firms advancing to Shizuoka Prefecture to build plants or business bases.

Investment Guide

Q. Procedures for tax payment in Japan

A. It needs to report the establishment of branch office or Japanese subsidiary to tax offices of prefecture and city counter for national taxation. Representative office is not taxed and has no need to report below.

Receiver Report Content
Tax office Corporate  establishment Within two months after establishment of Japanese subsidiary
Becoming foreign general corporation Within two months after establishment of Japanese branch office
Opening of office paying salary Within one month after opening office paying salary
Tax office of Prefecture and  city Establishment of corporation Immediately after establishment of corporation(or new branch office)

:to the prefectural tax office

Establishment  of corporation To both prefecture and city government

(in case branch office :report of opening)

 

Q. Calculation of tax for individual income

A. There are two taxes for individual income, “Shotokuzei”= national and “Jyuminzei”= local.
And there are any temporary taxes for special purposes.

Income tax

  • Rate is depend on amount of income(progressive taxation).
  • Calculation 「(income -reduction(*1))×rate-reduction」

(*1) reduce a part of income for keeping fairness : deduction =「basic deduction, deduction for spouse,  for dependents, for social insurance etc.」

Taxable income(A)

Thousand yen

rate(B) deduction(C)

yen

≦1,950 5% 0
1,950< ~ ≦3,300 10% 97,500
3,300< ~≦ 6,950 20% 427,500
6,950< ~ ≦9,000 23% 636,000
9,000< ~≦18,000 33% 1,536,000
18,000<~≦40,000 40% 2,796,000
40,000< 45% 4,796,000

Individual resident tax

  • Prefecture and city tax, in case living in Shizuoka city as below
  • There are deduction for fixed tax(please refer to local government website)
type item Amount(yen)
Fixed Prefecture 1,900
City 3,500
Rate Prefecture Taxable income×4%
city Taxable income×6%

 

Q. Calculation for property tax

A. For business in Japan you need land, factory, building, machine or equipment etc. It needs paying tax below for possession of these assets.

Tax for acquisition real estate

  • Tax for acquisition of real estate like land or building they have to be paid to prefecture.
  • Each land or building is registered on the real estate register managed by city. The address, owner, appraised value (approximately 50-70% of market price are registered.
  • Tax rate is 3-4% of appraised value.

Property tax

  • It is imposed for land, building, depreciable assets for business (machine or equipment appraised value is over decided amount)and to be paid to city.
  • The appraised value of land or building is changed every 3 years according to regional current price.
  • Every 1st January, appraised value of depreciable asset is depreciated for life time decided for each asset by specific measure(depreciate by fixed sum or fixed rate )
  • Tax rate is 1.4% of these appraised value.

【Life time of major asset and depreciate rate】

asset Life time Fixed sum Fixed rate
Steel frame and reinforced concrete

(for factory, warehouse)

38year 2.7% 6.6%
Ditto (for office) 50 2.0% 4.0%
Equipment for measure(using electric or electronics) 5 20.0% 50.9%
Equipment for producing food 10 10.0% 25.0%
Equipment for metal working 10 10.0% 25.0%
Equipment for producing transportation machine 10 10.0% 25.0%
Office equipment, calculation machine, copy machine etc. 5 20.0% 50.0%

 City planning tax

  • There are areas using for downtown in Japan. These areas are used for building public facility or developing matched to regional needs.
  • In this reason some cities impose city planning tax to corporations and residents for the resources using these plans above.
  • Tax rate is 0.2-0.3% of appraised value of land and building.

Q. How to calculate corporate income tax

A. Tax calculating is depend on the size, amount of income and where to invest.in case the head quarter is located in Shizuoka prefecture, the listed rate below is  example. Please refer to the website of the Ministry of Finance or Local Government detail conditions and another.

It needs for legal taxation and saving tax special tax knowledge. So it is better to rely on or consults specialists like licensed tax accountants.

One stop center for foreign companies of Shizuoka introduces specialists experienced in foreign business.

General system and calculating

(1) Example

Establish corporation in Shizuoka city and subsidiary employ 40 employees has no office in another city.

  • Capital is over 10 million yen – 100 million yen or fewer(not 100% subsidiary of major company which capital is 500 million yen or more)(*1))
  • Income of last year is 25million yen or fewer(*2)

(*1) in case 100% subsidiary, it is limited the cost reduced from income and the income tax rate of lower part has to be changed.

(*2) 「income 」is approximately [revenue -cost=net profit(profit after reduced tax)」, but there is another process of reducing cost on taxation.(carrying deficit forward)etc. It means that income of taxation is different from accounting profit.

(2) Rate (applied for the fiscal year start after 1st April 2017)
Type Out line ≦4 million 4m< ≦8m 8m<
Corporate tax Last year income×rate 19.00% 19.00% 23.20%
corporate

resident tax

Prefecture Fixed depend on the amount of capital 52,500yen
Corporate tax×rate 3.2%
City Fixed depend on the amount of capital 130,000yen
Rate depend on corporate tax rate 9.70%
Business tax Last year income×rate 3.40% 5.10% 6.70%
Local corporate special tax Last year income×corporate business tax rate×rate 43.20%
rate+fixed Last year income×rate 26.32% 28.75% 36.01%
Fixed 182,500yen
actual +fixed(*3) Last year income×rate 21.54% 22.27% 27.93%
fixed 182,500yen

(*3) It is possible to reduce business tax and local corporate special tax as next year cost in taxation. And the actual tax rate after this dealing is real rate And fixed tax has to be paid in case the last year’s account settlement was in the red.

(3) Calculation example

In case last year taxable income was 25million yen ⇒ tax will be8m yen

(thousand yen)

Type Taxation Fixed Total
~4,000 4000~8000 8000~
Corporate tax 760 760 3,978 5,498
corporate

resident tax

Prefecture 24 24 127 52.5 228
city 74 74 385 130   663
事業税 136 204 1139 1479
地方法人特別税 59 88 492 639
総合税率+均等割 1,052 1,150 6,122 182.5 8,508
実効税率+均等割 861 891 4,748 182.5 6,683

 Any other condition

(1) Pro forma standards taxation “Gaikei Hyojun Kazei”
  • All corporation capital is over 100million yen has to pay according to amount of income, added value and amount of capital.
  • The corporation capitalized over 100million yen has no corporate tax reduction(fixed 23.9%) for income part under 8million yen and needs to pay plus fixed resident tax.
Type outline・classification ≦4million yen 4< ≦8 8<
Business tax Part of value added (value added (*1)×rate) 1.20%
Part of capital(capital×rate) 0.50%
income(last year income×rate) 0.30% 0.30% 0.30%
Local corporate special tax Last year income×corporate business tax rate×rate(*2) 414.2%

(*1) wage+paid interest+paid rent fee+income of fiscal year
(*2) business year start after 1st April 2016

(2) Over tax of corporate business tax
  • In Japanese local government impose some taxes for special purposes by regulations. In Shizuoka prefecture impose plus of corporate business tax for making countermeasure against south sea trough large earthquake under the condition.
  • Object corporation is 「capital is over 100million yen」「capital is 100 million yen or fewer and income is over 30 million yen」
  • For 5 years from 1st April 2014
  • Rate imposed as over tax as income part is 0.19~36% for pro forma standards taxation corporation and 0.25~0.48% for others.
(3) Treating deficit
  • Calculated deficit of each business year is available to carry forward for 10 years under any conditions and procedures.
  • But corporation 「capital is over 100million yen」「100% subsidiary of the corporation capitalized 500 million or more」are districted to count cost for taxation.

Q. Tax rate revel of Japan in the world

A. Corporate tax revel comparing in the world is showed in the list below researched by  the ministry of finance(actual tax rate)

Country or region Basic rate Important matter
Japan 2012~2013 37.00% Capital over 100 million yen,

But not included fixed tax out of pro forma standard taxation nor over tax of local government

2014 34.62%
2015~2016 29.97%
2017 29.74%
U.S.A.(California) 40.75% Not include city corporate tax(ex.5% in NY)
France 33.33% Not include corporate income social tax
Germany(national avg.) 29.72% Business tax rate is differ depend on city
China 25.00% Both national and local government
Korea(Seoul) 24.20% Need added fixed tax depend capital, number of employee
England 20.00%  
Singapore 17.00%  

Looking for actual tax rate, Japanese rate has been diminishing year by year and it will be reduced from now on. But it is relatively high revel in the world.

But the view point of business cost, there are many important issues beside for tax. Actually it is important to consider comprehensive comparing and judgement based on concrete business plan.

  • Japanese VAT rate revel is cheapest in the world.(Japan 8%, China17%, France19.6%, Germany19%)
  • Generally Japanese social insurance cost is lower than EU countries(social insurance cost of corporation per GDP:Japan5.1%, germany6.7%, france11.3%(2010)
  • Actual cost of corporation is affected by current exchange rate.

Q. Japanese tax system

A. There are national tax and local tax (prefecture and city) in Japan.
From the object for taxation there are several taxes in Japan below.

Income tax

  • Imposed taxes on income of corporation and individual have several kinds below

a National tax …Income of individual or corporation
b Local tax    …・Prefecture resident tax(individual , corporation)

・City resident tax (individual, corporation)
・Business tax(individual, corporation)

  • Rate is differ depend on amount of income, scale of company(capital),place of investment etc.
  • To resolve the problem of fairness or double taxation, the object will be sorted depend on types of investment.
Investment type                  Content
Representative office Non taxation
Branch office Taxed for income occurred in Japan in principle
Subsidiary

(Japanese corporation)

Taxed for all income no matter where it occurred

In case dividing profits to parent company it is taxed a part of dividend

* It needs to be careful because there may be taxed case depend on the kind of business.

Tax for property

  • “Koteishisan zei” Taxed by city for fixed assets of corporation or individual(land, building, machine and equipment etc. for business)
  • Rate of tax is different from city(4%)

VAT

  • “Shohizei” =value added tax :Taxed for service and commodity almost all things. Except for several things (land, transfer of security, interest etc. and related to medical and welfare )。

Tax for business

  • “Inshizei” =stamp tax :Taxed for business and contract.(differ from kind of contract and amount. (Ex. 400yen for contract agreement amount one million yen)
  • “Fudosan shutokuzei” :tax for real estate acquisition(3-4%)
*another tax

National tax 「tax for tobacco」「tax for alcoholic」「tax for oil and gas」
Local tax [tax for town plan」「tax for car」etc.
Please refer to website of the ministry of finance and local government.

Q. Procedures for postpone period stay and reentry etc.

A. It is indispensable resident status and it requires accurate procedure for each case.

Permission for reentry( deemed reentry)

  • In principle the resident status of foreign people is disappeared in embarkation from Japan, and required to get new status and visa for reentry.
  • For avoiding complex, it is possible to get permission for reentry from immigration office before disembarkation. It is possible to reentry with before resident status to reentry at longest for 5 years without visa procedures.
  • If the period out of japan is 1 year or shorter, it is possible to use easy procedure “permission of deemed reentry” .
  • The foreigner has valid passport and resident status is possible reentry by before resident status within one year after disembarkation by checking application space in the reentry embarkation and disembarkation ED card

*please refer to immigration website  http://www.immi-moj.go.jp/newimmiact_1/point_3-4.html)。

 Renew and change of resident status

  • It is possible to renew the period decided at immigration in stay. If there are period 6 months or longer it is possible to apply approximately before 3 months expiration date.
  • In case changing activity in the period living in Japan, it is required to change resident status. Ex. The case changing from officer transferred to japan to become president of independent company it is required to change status from “Intra company transferee” to “Business manager”.

Procedures for family with transferee

  • The family or children move from foreign country with people charged in business in Japan are entitled to get visa permission as “Family stay”
  • In that case it is possible to go to school but required another permission to do profit activity.

Q. Types of resident status

A. There are 27 types of resident status, in case of business status is below

Status Possible activities example valid period
Business manager Activities to manage trades and other business in Japan or get engaged in administration of the relevant business

<Required condition>

ž  Out of management employ over 2 employee continuously living in Japan or invest 5 or more million yen

ž  In case manager it needs 3 or longer management experience

Representative or manager 5,3,1 year
Or 4,3 months
Engineering/

Specialist in humanities/

International services

Activities require technics or knowledges in the natural science like science and engineering and in the human science like study of law, economy and sociology etc. depend on the contract with Japanese organization. Or activities need  thought or sensitivity based on  foreign culture.

<Required condition>

ž  Graduate university the faculty related to the business activities and experienced 10 or longer years

ž  In case based on foreign culture

experienced 3 or longer years business activities

 

Mechanical engineer, interpreter, designer technician

Teacher of foreign language

Engaged person in marketing

5,3,1 Year
Or 3month
Intra-company transfer Activities related to engineering, humanities service or international service by transferred person from foreign base in japan

<Required condition>

ž  Continuously engaged in the activities at foreign place for one year or longer before transfer

ž  salary is equal or more to Japanese

Transfer from foreign country 5,3,1 Year Or 3 month
Legal/accounting services

 

Activities in legal or accounting allowed for foreign lawyers, accountants, or specialists licensed in those area Lawyer, accountant etc. 5,3,1 Year Or 3 month
Skilled labor Activities need skilled technics in special industry depend on the contract with Japanese public or private organization Cook of foreign sports trainer etc. 5,3,1 Year Or 3 month

*any other types

Diplomacy, Official, Art, Media, Activities of culture etc.
(please refer to the website of immigrant office  http://www.immi-moj.go.jp/tetuduki/kanri/qaq5.htm)。

Q. Procedures for staying in Japan

A. It is required for foreign people to stay for long period to have valid passport and visa to enter Japan and authorized resident status.

The representative or employee come from foreign countries have to make procedures below.

  • There are many kinds of visa and resident status according to the purpose. It needs to get visa and resident status for business according to duties.
  • It is possible to get in Japan by “short stay visa” for a short period to stay for meeting or exhibition and business meeting etc. non profitable activity like sightseeing.
  • In Japan there are “Gyosei Shoshi = certified administrative procedure specialist” who can advise about embarkation and disembarkation, staying etc. It is practical to offer those specialists.

[ Prepare ] in Japan

Apply the certification of status entitled staying Japan
Embark with short stay visa and apply for certification. It is possible to be done by agency.

Get the certification
Sent directly the said or agent in Japan from the immigration bureau

*In some cases, some foreigners who have already lived in Japan with the short stay visa might get certificate of eligibility in Japan without returning your country to apply it at Japanese embassy.

[ Apply ] out of Japan

At the diplomatic establishment abroad
Apply business visa with certification status of japan at the diplomatic establishment abroad

Get the business visa
Get the visa


[ Immigration ] in Japan

Immigration with business visa
Get the permission enter in japan and resident card for immigration, with business visa and certification of status.

*It will be issued “status card” for foreigners admitted staying for medium or long term at Narita and Haneda airport etc. It means possible getting on site. But at the any other airports the card will be send by mail afterwards.

Q. Any other reports to public office except registration of company

A. After registration of company it needs procedures below.

There are limit times to apply or some reports required in advance.

Receivers Main content
The tax office Report of company establishment

Report of opening the office for salary payment

Tax office of prefectural government Report of company establish
Tax office of city government Report of company establish
Labor standards office Report of business application (when employ labor)

Report of approval of labor insurance(when the labor insurance is approved)

Report of the premium of labor insurance・rough estimation・increase premium・defined premium (when social insurance is formed)

Report of work rules(over 10 employment)

Public employment agency Report of establishing the place of labor insurance(when start the employment)
Social insurance office Report of the place for health insurance, corporate employee pension plan(when start the employment)

Report of qualification of employee for health insurance and corporate employee pension plan(when start employment)

Report of the dependent for health insurance(move)(if the insured person has dependent)

 

Information
  • 2018/11/21 Shizuoka pref. gain top rank in manufacturing medical equipment and medicine for seven streight years
  • 2018/09/07 2018/9/8-14 Shizuoka pref. Gov. send the delegation to Nebraska U.S.A.
  • 2018/09/07 Shizuoka – the Best Channel to Japanダウンロード
  • 2018/09/07 Food Science Hills Storyダウンロード
  • 2018/09/07 AOI (Agri Open Innovation) Projectダウンロード

supporting
foreign-affiliated companies

One-Stop Center.

One-Stop Service Center | Shizuoka international Business Association.

Shizuoka International Business Association,
44-1 Ohtemachi, Aoi-ku, Shizuoka-shi, Shizuoka 420-0853 Japan.

Telephone:
+81-(0)54-254-5161

Facsimile:
+81-(0)54-251-1918

* Under entrustment from the Shizuoka prefectural government, the Center is operated by the Shizuoka International Business Association (SIBA).

* The cost for the operation of the Center is born by the prefectural government. Anyone can use the Center free of charge.