In comparison with most other countries, Japan’s tax laws can be complicated, with several different types of taxes due. In Japan, only a “certified tax accountant” can offer tax-related services, here at PKF Japan we are home to a team of Certified Professional Accountants (CPA), Enrolled Agents (EA), and Tax Advisors who are all former members of the “Big 4” consultancies. As a one-stop taxation support service for Japanese corporations and branches, we provide our clients with a quality service that is comparable to the other major firms but at a reasonable price.
We provide a range of tax-related advisory services that meet the needs of our clients, commensurate to their size and the current stage of their business. Our services are not limited to compliance with Japan’s domestic tax laws, as we also provide advisory services for international taxation. The scope of our international taxation services extends across several different areas, including thin capitalization taxation, anti-tax haven measures, transfer pricing taxation, foreign dividend exemption systems, and tax treaties.
PKF Japan offers an extensive domestic taxation service to our wide range of clients. Japanese corporations that are expanding overseas will make use of our domestic tax services, as well as foreign companies operating in Japan. Our skills and experience allow us to deliver these services in a timely and flexible manner.
With the increase in cross-border transactions between enterprises, the tax laws relating to these transactions become more onerous and complicated. We provide international tax advisory services that address our clients’ concerns, including tax treaties, thin capitalization taxation (relating to corporate debt), anti-tax haven, or as it is also known as Controlled Foreign Company (CFC) measures and foreign tax credit systems.
Recent years have seen the introduction of tax reforms that impact companies that are undergoing restructuring. We offer tax advisory services for a whole range of specific events, including corporate mergers and demergers, share exchanges, share transfers, payments-in-kind, asset purchases, and in-kind distributions.
Undertaking any business activities overseas without taking the necessary transfer pricing tax measures may expose you to the risk of incurring the expense of unexpected and additional taxation at a later date. We have an established partnership with an accounting and tax firm that specializes in transfer pricing services to provide our customers with the best possible advice when it comes to transfer pricing and associated taxation.
In Japan, tax returns must be prepared and filed at the tax office within two months of the closing month. These tax returns require the inclusion of several supporting documents as attachments, starting with the year-end financial statements. We will provide you with the necessary services to meet the tax return requirements, including preparing and filing all the required tax returns and submitting the notifications on tax treaties based on the current tax laws. We can prepare tax returns for you for all your relevant requirements, including for the following taxes:
We are currently working as a tax agent for many foreign companies here in Japan. Once a company in Japan reports a profit, the tax office will conduct a tax audit every few years, the periodicity being dependent on the size of the company.
In addition to preparing and filing your tax returns, we can also offer you our audit support service. This service involves helping you step-by-step when your business is required to be audited ― from the preparations needed before the audit through to support during the actual audit itself. Many of our tax accountants have extensive experience of undertaking and receiving tax audits, and they know precisely what the auditors require. They will be on hand to coordinate with the tax auditor on your behalf and help you complete the audit successfully. Also, we can consult on your behalf directly with the National Tax Agency and your designated tax office should you have any queries or concerns about any tax issues or policies.
Misunderstanding and errors can happen to anyone. Even in Japan, there have been cases where taxpayers were required to pay taxes that they did not need to pay, including when the taxpayer had previously paid the appropriate amount of tax. Here at PKF Japan, our team of experienced tax accountants is ready and able to act as your company’s agent during tax audits to identify and resolve any misunderstanding or errors before they come into effect.
What is a tax audit?
A tax audit is when an employee from either the National Tax Bureau or the local tax office arrives to inspect your tax filings to check that the information provided is complete and correct. There are two main types of tax audits, a voluntary tax audit, and a tax investigation.
A tax examiner will conduct a voluntary tax audit with the consent of the taxpayer, and the tax examiner may want to question the taxpayer on issues related to tax laws, including the Act on General Rules for National Taxes, the Consumption Tax Act, and the Income Tax Act. Although defined as being voluntary, any taxpayers who receive a notification for such a tax audit is obliged to consent to the audit. Any refusal to allow the tax audit without an acceptable reason will result in penalization of the taxpayer.
A tax investigation, on the other hand, will be conducted by the National Tax Agency’s Criminal Investigation Department following the issuance of a court order under the National Tax Violations Contract Act.
We offer our clients the option to consult with the National Tax Agency and local tax offices on their behalf and in advance regarding their tax issues, and we assist our clients in defining their tax policies. From consulting with tax accountant associations to seeking advice from tax accountants who have worked as part of the National Tax Agency, we studiously examine our clients’ issues from many different perspectives to obtain a broad view of opinion. If we are unable to get a clear answer from the tax office, or a definitive answer that would serve as a reference should any disagreements with the tax office about tax policies arise in the future, we will prepare a tax opinion letter for our clients. Some examples of the topics where we have prepared tax opinion letters for our clients include:
A tax agent is a person or entity that handles all the matters related to taxation on behalf of a taxpayer who does not hold an address (either home or office) within Japan. Our firm offers the following tax agent services:
You can appoint a tax agent from our firm for cases such as when a foreign corporation closes its Japanese branch and is unable to file any due tax return by the day before the branch closing date. Or if an overseas-bound seconded employee is unable to submit their tax return by the day before their departure from the country. Even if you do not have a domestic office in Japan if any transactions such as the transfer of taxable assets occur domestically and your company’s taxable sales in the previous two calendar years (or fiscal years) exceed 10 million Japan yen, then you would still need to pay consumption taxes in Japan. In all these cases, you would need to designate a tax agent to file the taxes on your behalf.
Foreign Language Support
Our firm is home to a highly experienced team of staff who can communicate with you in both English and Chinese (Mandarin and Cantonese). Following our link up into the global PKF International accountancy network, we now have expanded our operations to include over 400 offices across 150 countries, allowing us to tap into this network to provide you with even better-localized support. Any clients who cannot communicate in Japanese do not need to worry about any language barrier as we can always find a way to work together using a common language, providing the services that you need.
Tax Payment Proxy
There are several circumstances where foreign nationals are obliged to pay taxes in Japan, even if they do not have any domestic Permanent Establishment (PE). Taxes that you may be required to pay to the Japanese tax office include consumption tax and fixed assets tax. We can prepare and submit your tax returns to the tax office on your behalf and facilitate the payment of any taxes due. Conversely, we can also request on your behalf any tax refunds that may be due as a refund request proxy.
Income Tax Filing
Japan’s Income Tax Act categorizes all non-residents who earn any income in Japan as income taxpayers once this income exceeds a set limit. For example, income earned from the leasing of real estate in Japan, which exceeds a defined amount, will require the lessor to file an annual tax return to declare this income.
Before we offer our services, our team at PKF JAPAN will typically schedule an initial consultation with potential clients to ensure that we fully understand their business, identify the most appropriate options for their individual needs, and allow us to provide an accurate quotation. We may ask you for copies of the following documents to help this process:
Our TAX services boast the following four major features:
PKF JAPAN is home to a core team of certified professionals, including Certified Professional Accountants (CPA), Enrolled Agents (EA), and Tax Advisors who are all certified in Japan, and who have experience of working for the other major accounting firms. We are committed to providing accounting support to companies from across the world when they seek to expand their business into Japan ― either as companies or branches. We provide services to a wide range of clients from multiple industry sectors, from international companies listed overseas to those operating in the global aviation industry.
PKF JAPAN’s team of specialized consultants, including our certified accountants and tax accountants, are light on their feet. We are a fast and agile service provider, reacting to our clients’ needs whenever required, and delivering effective solutions. We recognize that it is essential for our clients that we swiftly complete our work when it comes to selecting tax principles, as well as delivering our accounting services to meet our clients’ taxation needs. Even when providing accounting advice, we guarantee that we will provide all our clients with prompt and decisive action. We have put together an integrated team of Certified Professional Accountants (CPA), Enrolled Agents (EA), Tax Advisors, Lawyers, Certified Social Insurance and Labor Consultants, Legal Advisors, Business and IT Support Staff, Bookkeepers and Administrative Assistants who, between them, can provide the services that you require.
PKF JAPAN’s team includes qualified and experienced tax accountants who are familiar with international tax affairs. In today’s global marketplace, international corporate activities are not only affected by Japan’s tax laws but also by the laws of other countries where business transactions take place. Also, for diversified corporate entities, it is now necessary to consider tax restructuring options and consolidated tax payments as part of the tax planning activities across the entire group. We provide expert advice and tax consultation services, providing you with the right help for your tax affairs and which is consummate with the diverse nature of modern business activities.
Here at PKF JAPAN, we employ bilingual staff who are proficient in the major languages for international business, including English and Chinese. Over recent years we have seen an increase in both foreign business expansions into Japan and the overseas business expansions of Japanese enterprises. In such an evolving business environment, we are proud to be able to offer our tax services in both English and Chinese to enhance and expand the support that we can provide to our clients.