Group Corporation Taxation/Japan AC Outsourcing

Japan AC Outsourcing Co., Ltd. SAKUMA CPA OFFICE



Japan AC Outsourcing Co., Ltd. SAKUMA CPA OFFICE We specialize in providing professional Accounting &Bookeeping and Tax services in Japan.



Group Corporation Taxation The wholly-owned subsidiary or sub-subsidiary in Japan of an overseas parent company with a stated capital of not less than 500 million yen is not entitled to the following tax-related special treatments which will be granted to companies classified under the Japanese Corporation Tax Act as small and medium sized enterprises. 1) Reduced Income Tax Rate The reduced income tax rate of 18% will not apply to taxable income up to 8 million yen, and the rate of 30% will apply instead. 2) Taxation on Reserve In the case of a corporation the Japanese company of which has a stated capital of not more than 100 million yen, taxation on the internal reserve of the company will be exempted. However, the wholly-owned subsidiary or sub-subsidiary in Japan of an overseas parent company with a stated capital of not less than 500 million yen will be subject to taxation on the reserve as follows. Amount of Tax Imposed on Reserve ＝ [Income, etc. － (Dividends + Corporation Tax, etc.) － Deduction from Reserve] × Special Tax Rate () Special Tax Rate Amount of Taxable Reserve Portion not more than 30 million yen: 10% Portion more than 30 million yen but not more than 100 million yen: 15% Portion more than 100 million yen: 20%
3) Entertainment and Social Expenses, etc., are excluded from tax deductible Expenses. The flat deductible system under which deduction is allowed up to six million yen a year will not apply, and all entertainment and social expenses will be excluded from deductible expenses.