Japanese Business Glossary

損金 (sonkin) refers to deductible expenses in Japan. These are the costs and expenses that a business can deduct from its taxable income when calculating its corporate income tax. By deducting these expenses, the business reduces its overall taxable income, thereby lowering its tax liability.

Deductible expenses includes various types of business expenses, such as operating costs, salaries, rent, utilities, depreciation of assets, and other expenditures that are necessary for the company's operations. These expenses must be ordinary and necessary for the business and properly documented to be eligible for deduction.

Understanding sonkin is crucial for accurate financial management and tax compliance. Properly identifying and recording deductible expenses helps businesses optimize their tax obligations and maintain compliance with tax regulations.

国税専門官 (kokuzei senmonkan) is a specialized national tax officer in Japan. These officers work for the National Tax Agency and tax offices, where they are responsible for ensuring proper taxation and securing tax revenues. Their duties include conducting tax audits, investigating tax evasion, and managing tax collections.

To become a specialized national tax officer, candidates must pass a rigorous national civil service exam. This exam has two categories: 国税専門A and 国税専門B. Category A is for general tax officers, while category B focuses on those with a background in science, engineering, or digital fields.

The exam includes sections on general knowledge, specialized tax law, accounting, economics, and problem-solving skills. The difficulty level is high, with a competitive selection process.

扶養 (fuyo) refers to "dependents" in Japan. This term is commonly used in the context of tax and social security to describe individuals who are financially supported by someone else, typically a family member. The concept of fuyo is important for determining tax deductions and benefits for the person providing the support.

In the Japanese tax system, taxpayers can claim deductions for dependents they support, which reduces their taxable income and, consequently, their tax liability. Dependents can include children, spouses, elderly parents, and other relatives who rely on the taxpayer for financial support. To qualify as a dependent, the individual must meet certain criteria, such as having a limited income and living within the same household or being financially supported by the taxpayer.

Claiming dependents not only provides tax benefits but also affects social security and health insurance premiums. For instance, family members who qualify as dependents may receive health insurance coverage under the primary policyholder's plan without additional costs.

Understanding Japan's dependent system is essential for taxpayers as it can significantly impact their financial planning and tax obligations. It ensures that those who provide financial support to their family members receive appropriate tax relief and social benefits.

源泉徴収 (gensen choshu) is the system of tax withholding in Japan. Under this system, employers deduct income tax directly from employees' salaries and wages before they are paid. This withheld tax is then submitted to the tax authorities on behalf of the employees.

The primary purpose of tax withholding is to ensure timely and efficient tax collection, reducing the burden on individual taxpayers to pay large sums at the end of the tax year. It also helps the government maintain a steady flow of revenue throughout the year.

For employees, this system simplifies tax obligations, as the necessary taxes are automatically deducted from their earnings. At the end of the year, individuals may need to file a tax return to reconcile their withheld taxes with their actual tax liability, potentially resulting in a refund or additional payment.

課税対象額, or "taxable amount," refers to the portion of an individual's or entity's income or assets that is subject to taxation under Japanese law. This amount is determined after various deductions and exemptions are applied to the gross income or total asset value. It forms the basis for calculating the amount of tax owed to the government. Understanding one's taxable amount is crucial for accurate tax reporting and compliance, as it directly affects the tax liability. Proper calculation ensures that taxpayers neither underpay nor overpay their taxes, thereby avoiding potential penalties and ensuring that they fulfill their legal obligations.

ワンストップ特例申請書, or "One-Stop Special Application Form," is a document used in Japan for the simplified handling of certain tax procedures related to the furusato nozei program, allowing taxpayers to manage the allocation of their hometown tax payments (ふるさと納税) through a single application process, instead of dealing with multiple local government offices individually. This form streamlines the administrative process, making it more convenient for taxpayers to allocate their contributions to different localities, and ensures that the tax benefits are properly distributed. This system is particularly useful for those who make donations to multiple municipalities, as it consolidates the reporting and management into a single step, saving time and reducing paperwork.