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Special Rules for Liquidating a Company in Japan

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Companies in Japan may decide to close down and liquidate all assets for a variety of reasons. In all cases the process will be easier and cost less when net assets are positive.  When the company has positive net assets the liquidation process is straight forward and simple, only requiring a resolution to close the […]

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Japanese Withholding Tax

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For Residents: The following are the income categories that you need to deduct withholding tax: Fees for writers, lecturers/speakers, translators, interpreters, illustrators, composing music and editing, Fees for licensed professionals such as lawyers, CPAs, certified tax accountants, legal scriveners, consultants that provides analysis of a company and provide advice. Salaries/bonus Retirement pay (a half of […]

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Establishing a Company in Japan

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It is easy to set up a company in Japan. There are no minimum capital requirements. There is no residency requirement for a directors and your company can have all non-resident directors. The most popular types companies being established are Kabushiki Kaisha (KK) called a join-stock corporation in English, and Godo Kaisha (GK) called a […]

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Angel Investment Taxation in Japan

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Tax Benefits Type A (company younger than 3 years old): Benefit (#1) The investment will be deductible from gross taxable income (e.g. salary, business, property income) up to the lesser of 40% of the gross income and 10,000,000 yen. Benefit (#2) Capital loss from selling shares to a qualified company can be carried over for […]

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Hiring Your First Employee in Japan

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Hiring your first employee in Japan can be a big step. You will need to decide whether you should hire the person as an employee or as a contractor.  Most people prefer to be hired as an employee as they are afforded more protection and benefits. However, hiring someone as an employee in Japan is […]

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Japanese GAAP & Tax Rules for Cryptocurrencies

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The new Japanese GAAP for cryptocurrencies was announced in March 2018. It requires that valuation of a cryptocurrency has to be done using the mark-to-market method if there is an active exchange or market for that currency.  So cryptocurrencies such as Bitcoin, Ethereum, XRP should be marked to the market. Any difference in valuation should […]

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Reduce Taxes in Japan by Investing in Art

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In Japan artwork valued lower than one million yen per item can be deducted from corporate taxable income via depreciation. The cost of the artwork has to include auction fees and any other expenses incurred, such as delivery fees, with the purchase. The artwork can be depreciated over eight years or 15 years depending on […]

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Establishing a Branch Office in Japan

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Establishing a branch office in Japan can be more complicated than establishing a new stand-alone company. But there are some benefits for doing so. In some situations a branch office may be more tax efficient than a joint-stock company.  For example, you might want to use operating expenses in Japan to reduce your company’s taxable […]