Japanese Business Glossary

生命保険料控除 (seimei hokenryo kojo) is a tax deduction available to individuals who have paid life insurance premiums. It allows taxpayers to reduce their taxable income, thereby potentially lowering the amount of income tax they owe.

You must have paid premiums for life insurance, medical insurance, or individual annuities. These premiums can be for policies that cover you, your spouse, or your dependents. There are maximum limits to the amount you can deduct based on the type of insurance. For policies taken out after January 1, 2012, the maximum deduction is ¥40,000 for general life insurance, ¥40,000 for medical insurance, and ¥40,000 for individual annuities. For policies taken out before January 1, 2012, the maximum deduction is ¥50,000 for life insurance and ¥50,000 for individual annuities. The amount you can deduct depends on the premiums you have paid. You need to calculate the deduction separately for each type of insurance and then sum them up.

To claim this deduction, you need to submit proof of the premiums paid, which is usually provided by the insurance company in the form of a certificate. By claiming the life insurance premium deduction, you can reduce your taxable income, which may lead to a lower tax bill. It's a beneficial way to take advantage of the premiums paid for life insurance and related policies.

マルサ (Marusa), Special Tax Investigation Department within the National Tax Agency (NTA), is responsible for investigating and combating serious cases of tax evasion and fraud. Marusa agents are known for their rigorous and thorough investigations. They often target large corporations and high-profile individuals suspected of significant tax evasion. The term Marusa has become synonymous with the fear of being investigated by these highly specialized tax inspectors. Their work involves conducting detailed financial audits, investigating suspicious financial activities, and gathering evidence for legal proceedings. Due to their high-profile nature, Marusa operations sometimes receive media coverage, highlighting the seriousness with which the Japanese government treats tax compliance.

インボイス対応 (inboisu taiou) refers to the necessary actions businesses must take to comply with Japan's new Invoice System, implemented on October 1, 2023. This system, known as the 適格請求書等保存方式 or Qualified Invoice System, requires businesses to issue and retain qualified invoices to claim input tax credits for consumption tax (VAT).

Qualified invoices must include details such as the invoice issuer's registration number, applicable tax rates, and the tax amount categorized by tax rate. Only businesses registered as "qualified invoice issuing businesses" can issue these invoices. To become registered, businesses need to apply to the tax office and receive approval.

Both issuers and recipients of qualified invoices must retain copies for seven years. This retention can be done electronically if compliant with Japan’s e-Document Law.

For sellers, this means updating invoicing processes to meet the new criteria. Buyers need to ensure they receive qualified invoices to claim input tax credits, and cannot claim these credits if they receive invoices from non-registered businesses.

Companies like freee offer accounting software that automates the creation and management of qualified invoices, ensuring compliance with the new system. The Japanese government provides support, including IT subsidies, to help small and medium-sized enterprises transition smoothly.

所得控除の額の合計額 (shotoku kojo no gaku no gokeigaku) means the total amount of income deductions in Japanese. This term represents the sum of all deductions that can be subtracted from an individual's gross income to determine their taxable income. These deductions may include various types such as basic deductions, dependent deductions, social insurance premiums, and others. The total amount of these deductions helps to reduce the overall tax liability for the taxpayer.

保険料控除 (hokenryo kojo) means insurance premium deduction in Japanese. This is a tax deduction available in Japan for individuals who pay premiums for certain types of insurance. By claiming this deduction, taxpayers can reduce their taxable income, which in turn lowers their overall tax liability.

Insurance types that may qualify for this deduction include life insurance, earthquake insurance, and private pension insurance. To claim the deduction, taxpayers must submit relevant documentation, such as receipts or certificates of payment, when filing their annual tax return or during the year-end adjustment process through their employer.

法人税法 (hojin zeiho) refers to the Corporation Tax Act or Corporate Tax Law in Japan. This law governs the taxation of corporations and other legal entities in Japan. It outlines the rules and regulations for calculating, reporting, and paying corporate taxes, including the determination of taxable income, allowable deductions, tax rates, and filing requirements. The Corporate Tax Law ensures that corporations comply with their tax obligations and contribute to the public revenue.