Case 10
\nI have started a business in Japan though I heard that a withholding tax has to be paid regularly. I understand that the withholding tax is imposed on salaries, however, I do not know how it should be paid. Could you explain the withholding tax payment process as well as\u00a0other expenses which impose a withholding tax?
\n1.\u00a0\u00a0\u00a0 Withholding tax system
\nUnder the withholding tax system\u00a0certain types of income, such as salaries, interest, dividends and tax accountants\u2019 fees determine the amount of withholding tax. Income tax withheld under this system is settled through a year-end adjustment or by filing a final tax return for the year, except forms of income such as income from interest subject to \u201cseparate withholding tax\u201d that tax payment is completed only by withholding.
\nPersons obliged to withhold income tax and pay it to the government are called \u201cwithholding agents.\u201d All payers of income subject to withholding are withholding agents, including schools, government agencies, and even individuals and non-juridical associations or foundations, as well as companies. However, salaries, retirement allowances, and remuneration\/fees such as tax accountants\u2019 fees that are paid by an individual who regularly employs no more than two domestic employees are not subject to withholding income tax.<\/p>\n
2.\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Due date
\nA withholding agent shall in principle be paid by the 10th of the month following the month in which the income subject to withholding was paid.
\nIf the due date is a Saturday, Sunday, or holiday, the next business day shall be the due date. If payment is not made by the due date, the withholding agent may in principle have to pay delinquent tax and additional tax for non-payment.<\/p>\n
3.\u00a0\u00a0\u00a0 Submission of application form for withholding tax
\nA salary payer shall submit a \u201cNotification on the Establishment of a Salary-paying Office\u201d \uff08\u7d66\u4e0e\u652f\u6255\u4e8b\u52d9\u6240\u7b49\u306e\u958b\u8a2d\u5c4a\u51fa\u66f8\uff09within one month of the date of occurrence of any of the following events:<\/p>\n
(1) The establishment of a new office that handles salary payments (e.g. the establishment of a corporation or the opening of a branch or business office); or<\/p>\n
(2)\u00a0 The commencement of salary payment handling activities by any branch, business office, or similar establishment.<\/p>\n
Any withholding agent that pays salaries to fewer than 10 employees on a regular basis and submits an \u201cApplication for Approval Made in Relation to the Special Provision for Due Dates for Withheld Income Tax\u201d \uff08\u6e90\u6cc9\u6240\u5f97\u7a0e\u306e\u7d0d\u671f\u306e\u7279\u4f8b\u306e\u627f\u8a8d\u306b\u95a2\u3059\u308b\u7533\u8acb\u66f8\uff09and obtains such approval may take advantage of a special provision regarding the due dates for income tax withheld from salaries, retirement allowances and remuneration\/fees paid to tax accountants, etc. Under this arrangement, payment can be made twice a year, July 10 and January 10. Additionally, this rule is applied to only salaries, wages, retirement benefits and accountants\u2019 fees, etc.<\/p>\n
4.\u00a0\u00a0\u00a0 Scope of withholding tax
\nAs mentioned above, the withholding tax is imposed to salaries, interests, dividends, accountants\u2019 fees, etc. Basically, the withholding tax is imposed on service fees, however, it depends on the type of services and type of resident status. Therefore, it is recommended to check the type of fees and resident status upon each transaction.<\/p>\n
5. Payment procedure
\nThe withholding tax shall be paid at a local financial institution (such as a bank or post office) or over the counter at the competent tax office, together with submission of \u201cStatement (Tax Payment Slip) of Collected Income Tax\u201d\uff08\u6240\u5f97\u7a0e\u5fb4\u53ce\u9ad8\u8a08\u7b97\u66f8\uff08\u7d0d\u4ed8\u66f8\uff09).<\/p>\n
By Certified Public Accountant (CPA) & Tax Accountant,\u00a0 Koji Takahashi <Question> Under the withholding tax system certain types of income, such as salaries, interest, dividends and tax accountants\u2019 fees determine the amount of withholding tax. Income tax withheld under this system is settled through a year-end adjustment or by filing a final tax return for the year, except forms of income such as income from interest subject to \u201cseparate withholding tax\u201d that tax payment is completed only by withholding.<\/p>\n Persons obliged to withhold income tax and pay it to the government are called \u201cwithholding agents.\u201d All payers of income subject to withholding are withholding agents, including schools, government agencies, and even individuals and non-juridical associations or foundations, as well as companies. However, salaries, retirement allowances, and remuneration\/fees such as tax accountants\u2019 fees that are paid by an individual who regularly employs no more than two domestic employees are not subject to withholding income tax.<\/p>\n 2. Due date<\/p>\n A withholding agent shall in principle be paid by the 10th of the month following the month in which the income subject to withholding was paid.<\/p>\n If the due date is a Saturday, Sunday, or holiday, the next business day shall be the due date. If payment is not made by the due date, the withholding agent may in principle have to pay delinquent tax and additional tax for non-payment.<\/p>\n 3. Submission of application form for withholding tax<\/p>\n A salary payer shall submit a \u201cNotification on the Establishment of a Salary-paying Office\u201d \uff08\u7d66\u4e0e\u652f\u6255\u4e8b\u52d9\u6240\u7b49\u306e\u958b\u8a2d\u5c4a\u51fa\u66f8<\/a>\uff09within one month of the date of occurrence of any of the following events:<\/p>\n (1) The establishment of a new office that handles salary payments (e.g. the establishment of a corporation or the opening of a branch or business office); or<\/p>\n (2) The commencement of salary payment handling activities by any branch, business office, or similar establishment.<\/p>\n Any withholding agent that pays salaries to fewer than 10 employees on a regular basis and submits an \u201cApplication for Approval Made in Relation to the Special Provision for Due Dates for Withheld Income Tax\u201d \uff08\u6e90\u6cc9\u6240\u5f97\u7a0e\u306e\u7d0d\u671f\u306e\u7279\u4f8b\u306e\u627f\u8a8d\u306b\u95a2\u3059\u308b\u7533\u8acb\u66f8<\/a>\uff09and obtains such approval may take advantage of a special provision regarding the due dates for income tax withheld from salaries, retirement allowances and remuneration\/fees paid to tax accountants, etc. Under this arrangement, payment can be made twice a year, July 10 and January 10. Additionally, this rule is applied to only salaries, wages, retirement benefits and accountants\u2019 fees, etc.<\/p>\n 4. Scope of withholding tax<\/p>\n As mentioned above, the withholding tax is imposed to salaries, interests, dividends, accountants\u2019 fees, etc. Basically, the withholding tax is imposed on service fees, however, it depends on the type of services and type of resident status. Therefore, it is recommended to check the type of fees and resident status upon each transaction.<\/p>\n 5. Payment procedure<\/p>\n The withholding tax shall be paid at a local financial institution (such as a bank or post office) or over the counter at the competent tax office, together with submission of \u201cStatement (Tax Payment Slip) of Collected Income Tax\u201d\uff08\u6240\u5f97\u7a0e\u5fb4\u53ce\u9ad8\u8a08\u7b97\u66f8<\/a>\uff08\u7d0d\u4ed8\u66f8\uff09).<\/p>\n <\/p>\n By Certified Public Accountant (CPA) & Tax Accountant, Koji Takahashi,<\/em> Case 10 I have started a business in Japan though I heard that a withholding tax has to be paid regularly. I understand that the withholding tax is imposed on…<\/p>\n","protected":false},"author":5,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[38],"tags":[],"class_list":{"0":"post-493","1":"post","2":"type-post","3":"status-publish","4":"format-standard","6":"category-news-2"},"_links":{"self":[{"href":"https:\/\/www.tkpartners.or.jp\/en\/wp-json\/wp\/v2\/posts\/493","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.tkpartners.or.jp\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.tkpartners.or.jp\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.tkpartners.or.jp\/en\/wp-json\/wp\/v2\/users\/5"}],"replies":[{"embeddable":true,"href":"https:\/\/www.tkpartners.or.jp\/en\/wp-json\/wp\/v2\/comments?post=493"}],"version-history":[{"count":1,"href":"https:\/\/www.tkpartners.or.jp\/en\/wp-json\/wp\/v2\/posts\/493\/revisions"}],"predecessor-version":[{"id":6942,"href":"https:\/\/www.tkpartners.or.jp\/en\/wp-json\/wp\/v2\/posts\/493\/revisions\/6942"}],"wp:attachment":[{"href":"https:\/\/www.tkpartners.or.jp\/en\/wp-json\/wp\/v2\/media?parent=493"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.tkpartners.or.jp\/en\/wp-json\/wp\/v2\/categories?post=493"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.tkpartners.or.jp\/en\/wp-json\/wp\/v2\/tags?post=493"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
\nTokyo & Yokohama<\/em>Case 10<\/p>\n
\nI have started a business in Japan though I heard that a withholding tax has to be paid regularly. I understand that the withholding tax is imposed on salaries, however, I do not know how it should be paid. Could you explain the withholding tax payment process as well as other expenses which impose a withholding tax?
\n<Answer>
\n1. Withholding tax system<\/p>\n
\nin Tokyo &\u00a0Yokohama<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"