Japanese Business Glossary

自動車税 (jidosha-zei) is a Japanese automobile tax imposed on vehicles. This tax is levied annually on owners of motor vehicles registered in Japan. The amount of the tax depends on various factors, including the type, size, and purpose of the vehicle.

The tax revenue is used to maintain and improve road infrastructure and transportation systems in Japan. The tax rate varies based on the engine size (measured in liters) and the vehicle's type. Larger engine vehicles typically incur higher taxes. The tax bill is sent to vehicle owners in April, and payment is due by the end of May. Non-payment can result in penalties and restrictions on vehicle usage. Certain vehicles, such as electric vehicles or those used for public services, may qualify for tax reductions or exemptions.

税務 (zeimu) translates to "tax affairs" or "taxation" in English. In the context of business and finance, zeimu refers to all matters related to taxes, including tax compliance and filing, tax planning and strategy, understanding tax laws and regulations, and handling tax audits and disputes. Businesses in Japan must manage their tax affairs carefully to ensure they comply with local laws and optimize their tax liabilities. This includes dealing with corporate taxes, consumption taxes, payroll taxes, and other applicable taxes.

追徴課税 (tsuichou kazei) refers to "additional tax" or "back taxes" in English. This is a type of tax levied by tax authorities when they determine that a taxpayer has underpaid their taxes. Additional tax may be imposed due to various reasons such as underreporting income, claiming inappropriate deductions or credits, calculation errors, or late payment of taxes. When an audit or review reveals discrepancies or errors in the reported tax amounts, the authorities will calculate the correct amount owed and demand the payment of the difference along with any applicable penalties or interest. This is done to ensure compliance and to deter tax evasion.

繰延税金資産 (kurinobe zeikin shisan) translates to "deferred tax assets" in English. This accounting term refers to the amounts of income taxes that are recoverable in future periods due to temporary differences between the tax base of an asset or liability and its carrying amount in the balance sheet, or due to the carryforward of unused tax losses and credits.

Deferred tax assets are recognized when it is probable that future taxable profit will be available against which the temporary differences can be utilized. Essentially, they represent a future tax benefit that can be used to reduce taxable income. In practical terms, this means that a company can offset future taxable income with these deferred tax assets, thereby lowering its future tax liability. They are important in financial reporting and tax planning, as they impact a company's financial statements and tax strategies.

所得割額 (shotoku warigaku) refers to the income-based component of local inhabitant taxes in Japan. Local inhabitant taxes, which consist of a per capita levy and an income-based levy, are paid to prefectural and municipal governments. The income-based component shotoku warigaku is calculated based on an individual's taxable income from the previous year.

First, determine taxable income, which is the total income minus any applicable deductions. Then, apply the tax rate. Local inhabitant taxes usually have a flat rate. For municipal tax, it's typically around 6%, and for prefectural tax, it's around 4%. These rates can vary slightly depending on the region.

Finally, multiply the taxable income by the applicable tax rates to get the income-based tax amount. The shotoku warigaku is then added to the per capita levy to determine the total local inhabitant tax due. This tax is important for funding local government services and infrastructure.

法人事業税 (hojin jigyozei) refers to corporate enterprise tax in Japan. It is a local tax levied on the income of corporations operating within a prefecture. This tax is part of the broader corporate taxation system in Japan and is separate from national corporate income tax.

The corporate enterprise tax is imposed on both domestic and foreign corporations that have a business presence in Japan. The tax rate varies depending on the type and size of the business, as well as the prefecture in which the corporation operates. The rates and regulations can differ among the prefectures, reflecting local fiscal policies and economic conditions.

The tax is calculated based on the corporation's taxable income, which is derived from its business activities within the prefecture. The revenue generated from hojin jigyozei is used by local governments to fund public services and infrastructure projects, contributing to the overall development of the region.

In summary, hojin jigyozei is a local tax on corporate income that supports regional government finances and services. It is an important aspect of corporate taxation for businesses operating in Japan.