Japanese Business Glossary

事業者 (jigyosha) means "business operator" or "business entity" in Japanese. It refers to individuals or organizations engaged in commercial, industrial, or professional activities.

A jigyosha is a broad term which is used to reference a sole proprietor (individual business owner), a partnership, a corporation, or a limited liability company (LLC). In Japan, business operators are subject to various legal and regulatory requirements, including business registration, tax filing, and compliance with industry-specific regulations. Understanding the responsibilities and obligations of being a business operator is essential for anyone looking to start or run a business in Japan.

事業所得 (jigyo shotoku), business income, refers to the income earned from running a business or being self-employed. This type of income includes profits generated from business operations, sales, and services provided by individuals or business entities.

Business income is distinct from other types of income, such as salary (給与所得 = kyūyo shotoku) or investment income (譲渡所得 = joto shotoku).

In Japan, business income is subject to various taxes, including income tax and consumption tax. Business owners must keep detailed records of their income and expenses to calculate their taxable income accurately. They may also be eligible for certain deductions and credits to reduce their tax liability.

有価証券 (yūka shoken) refers to "securities" in English. These are financial instruments that hold value and can be traded. They represent ownership, such as stocks, a creditor relationship, such as bonds, or rights to ownership, such as options.

Securities can be divided into various types, including equity securities, debt securities, and derivative securities. Equity securities include stocks, which represent ownership in a company and entitle the holder to a portion of the profits. Debt securities include bonds and debentures, which represent money borrowed by the issuer that must be repaid with interest. Derivative securities include options and futures, which derive their value from an underlying asset, such as a stock or commodity.

Securities are essential components of the financial market, providing a means for raising capital, investing, and transferring risk.

登録免許税 (toroku menkyo zei) is a registration and license tax in Japan. This tax is levied on the registration of certain legal documents and transactions. It is commonly encountered during the incorporation of companies, transfer of real estate, and other legal registrations that require official acknowledgment by the government.

The tax rate and amount depend on the type of registration and the value of the transaction or asset being registered. For instance, when incorporating a company, the tax is calculated based on the company's capital amount, with a minimum tax amount set by law.

Incorporation registration typically requires the payment of this tax as part of the process. It's important to include this cost when planning to start a business in Japan.

配当控除 (haito kojo) refers to the "dividend deduction" in Japan. This is a tax deduction available to individuals who receive dividends from domestic corporations.

The purpose of the dividend deduction is to alleviate the double taxation of dividend income. Dividends are initially taxed at the corporate level as part of the company's profits. When these dividends are distributed to shareholders, they are taxed again at the individual level. The dividend deduction allows individual taxpayers to reduce their taxable income by a certain percentage of the dividends received, effectively lowering the overall tax burden on dividend income.

The specific deduction rate can vary, and there are certain conditions and limits that apply. This tax benefit is part of Japan's efforts to encourage investment in domestic companies by making dividend income more attractive to investors.

課税事業者 (kazei jigyosha) refers to a "taxable business entity" in Japan. This term is used to describe businesses that are required to pay consumption tax (similar to VAT or GST) on their sales.

A business becomes a taxable business entity if it meets certain criteria, such as exceeding a specific threshold of annual taxable sales. Once a business qualifies as a taxable business entity, it must register with the tax authorities and comply with the obligations of calculating, collecting, and remitting consumption tax on its sales to the government.

This status also allows the business to claim input tax credits for the consumption tax paid on its purchases and expenses, which can help offset the tax owed on sales.