Tax Year
Companies could define the business year on the articles of incorporation, and a tax year is defined by this business year. Companies have to file the tax return within 2 months after the end of the tax year. Individuals' tax year is a calendar year, that ends December 31. Individuals have to file by March 15.
Income Tax
Regarding companies, Japan has Corporate Income Tax law, called as "HO-JIN-ZEI". Regarding individuals, Japan has another Income Tax, called as "SHO-TO-KU-ZEI". Income tax is calculated by multiplying the taxable income by the tax rate. The format of a tax return for a corporate, has about 21.
Consumption Tax
When you figure consumption tax, you first classify all of your revenue transactions into 3 types. One is taxable revenue, second one is non-taxable revenue, and the last one is no tax revenue. Of course, it is too tough to classify all revenue transactions at the end of the tax year. Accordingly, Japan accounting system is required. Besides, there are 2 ways to figure your consumption tax. This means that it is difficult to figure consumption tax and prepare the tax return.
Residence Tax
Even if you have no income to be taxed on income tax, you are charged by this residence tax at minimum amount. This residence tax imposes both a corporate and an individual.
Local Corporate Income Tax
Local Corporate Income Tax is figured at the same format of income tax return, and this is paid at the same account.
Local Consumption Tax
Local Consumption Tax is also figured at the same format as consumption tax. 1.7% is the tax rate of local consumption tax, and totally it gets 8%.
Corporate Residence Tax
Residence tax is imposed by each local government. Accordingly, if your company has a lot of business sites, this calculation gets complicated.
Business Tax
Business tax is imposed by each local government. Business tax rate is the total amount of the tax calculated by 3 ways. One is determined by income, the second is determined by value-added amount, and the last is determined by capital amount.