Tax Procedures Required After Incorporating a Company in Japan

Incorporating a company in Japan is not the end of the setup process.

After company registration, a Japanese company is required to file several tax-related forms with the tax office, prefectural government, and municipal government.

These forms include notifications, applications, and registration forms.

For foreign founders and foreign-owned companies, it is important to understand the difference between these procedures. Some forms simply notify the tax office of certain facts, while others require approval or registration.

Missing a deadline may affect the company’s tax position, payroll procedures, or consumption tax status.

For this reason, the required tax procedures should be reviewed before or immediately after incorporation.

1. Main tax-related forms to check after incorporation

After incorporating a Japanese company, the main tax-related forms to check are as follows.

Not every filing is required for every company.

However, some filings must be submitted by a specific deadline. If the deadline is missed, the company may not be able to apply the intended tax treatment.

2. Notification of Corporation Establishment

The first filing to submit after incorporation is the 法人設立届出書, commonly translated as Notification of Corporation Establishment.

This form informs the tax office that a new Japanese corporation has been established.

For a Japanese company such as a Kabushiki Kaisha (KK) or Godo Kaisha (GK), it is generally submitted to the competent tax office within two months from the date of incorporation.

A copy of the articles of incorporation is usually attached.

This notification is the starting point for the company’s corporate tax administration and future tax filings in Japan.

3. Local tax notification

In addition to national tax procedures, a newly incorporated company must also consider local tax notifications.

The company usually needs to submit a corporation establishment or office establishment notification to the relevant prefectural and municipal governments.

The form and deadline differ depending on the local government.

If the company has a branch, sales office, or other business location in addition to its head office, additional local tax notifications may be required in each location.

This is important for foreign-owned companies because it may affect local inhabitant tax and enterprise tax filings.

4. Application Form for Approval of Filing Blue Return

If the company wants to use blue return filing from its first fiscal year, it must submit the 青色申告の承認申請書, or Application Form for Approval of Filing Blue Return.

Blue return filing is important because it may allow the company to benefit from certain corporate tax treatments, including the carryforward of tax losses, subject to the applicable requirements.

For the first fiscal year, the deadline is generally the earlier of:

• the day before the date three months after incorporation; or
• the day before the end of the first fiscal year.

If the first fiscal year is short, the deadline may come earlier than expected.

Therefore, the company’s fiscal year-end should be considered carefully at the incorporation stage.

5. Notification of Establishment/Relocation/Closure of a Salary-Paying Office

If the company pays director’s compensation or employee salaries, it must submit the 給与支払事務所等の開設・移転・廃止届出書, or Notification of Establishment/Relocation/Closure of a Salary-Paying Office.

This form notifies the tax office that the company has opened an office responsible for salary payments.

It is generally submitted within one month from the date the salary-paying office is established.

Foreign founders often start paying themselves director’s compensation soon after incorporation.

In that case, the company becomes a withholding-tax agent and must withhold income tax from salary payments and pay it to the tax office, in principle, by the 10^th day of the following month.

6. Application for the special provision for withholding tax payment dates

A company that pays salaries is generally required to pay withholding income tax every month.

However, if the number of salary recipients is usually fewer than 10, the company may apply for the special provision for due dates for withholding income tax.

If approved, certain withholding taxes can be paid twice a year instead of every month.

This procedure can reduce administrative work for small newly incorporated companies.

However, the special provision does not automatically apply retroactively. It should be considered early, around the time the company starts paying director’s compensation or salaries.

7. Consumption tax and the invoice system

Consumption tax is another important issue for newly incorporated companies.

In many cases, a newly established company does not have a base period for its first and second fiscal years.

As a result, it may initially be treated as a consumption tax-exempt business operator.

However, this is not always the case.

A company may become subject to consumption tax from the first fiscal year in cases such as:

• the stated capital is JPY 10 million or more;
• the company falls under the rules for specified newly established corporations;
• the company registers as a qualified invoice issuer.

If the company sells goods or services to Japanese corporate customers, those customers may ask the company to register as a qualified invoice issuer.

Once a company is registered as a qualified invoice issuer, it will generally need to file and pay consumption tax, even if it would otherwise have been exempt.

Before applying for invoice registration, the company should review the impact on pricing, customer relationships, and cash flow.

8. Other tax forms to consider depending on the business

Depending on the company’s business model and assets, the following forms may also need to be considered.

These forms are not required for every company.

However, if the relevant deadline is missed, the company may not be able to apply the intended tax treatment.

9. Common mistakes by foreign founders and foreign-owned companies

Foreign founders and foreign-owned companies often focus on company registration and bank account opening, but tax procedures are just as important.

Common mistakes include:

• assuming that incorporation completes all setup procedures;
• missing the deadline for blue return approval;
• paying director’s compensation without setting up payroll tax procedures;
• not understanding monthly withholding tax payments;
• applying for invoice registration without reviewing the consumption tax impact;
• submitting national tax forms but forgetting local tax notifications.

Company registration, tax procedures, payroll, banking, and visa planning are separate processes.

However, in practice, they are closely connected.

For example, director compensation may affect payroll tax procedures, social insurance, and visa planning.

Invoice registration may affect consumption tax obligations and pricing.

Local tax notifications may affect future tax filings in Japan.

For this reason, the tax procedures should be reviewed before or immediately after incorporation.

Conclusion

After incorporating a company in Japan, foreign founders should not assume that the setup process is complete.

At a minimum, the company should review:

• Notification of Corporation Establishment;
• local tax notifications;
• Application Form for Approval of Filing Blue Return;
• Notification of Establishment/Relocation/Closure of a Salary-Paying Office;
• withholding tax payment procedures;
• consumption tax and invoice system registration.

The key point is to prepare a tax procedure schedule before business operations begin.

By reviewing these procedures early, foreign founders and foreign-owned companies can reduce the risk of missed deadlines, unnecessary tax issues, and compliance problems after entering the Japanese market.

Need help with post-incorporation tax procedures in Japan?

Are you unsure about the tax procedures required after incorporating a company in Japan?

JGA supports foreign founders and foreign-owned companies with post-incorporation tax procedures, blue return approval, payroll and withholding tax setup, consumption tax review, invoice system registration, and accounting system preparation.

If you are planning to incorporate a company in Japan, we recommend reviewing the required tax filings before the company starts operations.