Why does TAX FILING matter?
KAKUTEI-SHINKOKU period is coming soon!
Every freelancer/sole-proprietor needs to stop their hand for a moment, and concentrates on tax filing process in February. As long as we are working as salary-men (employee at office), all our tax filing process is done by the employer which is called Nenmatsu-chosei (年末調整）. If we paid too much tax from our paycheck, we sometimes get back the extra payment from tax office through the Nenmatsu-chosei process.
Freelancers/sole-proprietors, however, don’t have a company or employer who can do it on behalf of us, and we have to do it by our own.
Proper tax filing → secure status in Japan
Kakutei-shinkoku (確定申告) matters because we sometimes get taxes back to our pocket, but most importantly, the proper tax filing process will help increase the possibility of getting Permanent Residency or Citizenship as Immigration Bureau closely looks at the past record of tax filing.
Many governmental offices consider people credible if they can properly complete the paperwork process, and that applies to the office in charge of visa process as well.
Follow the rules, Do it properly, Show the credibility, then improvise.
First of all, because it’s under the law
Tax filing and all the administrative paperworks are just frustrating, yes.
However, freelancers and sole-proprietors do their best to complete the tax filing process because it’s under the tax law (所得税法 第120条）.
第百二十条 居住者は、その年分の総所得金額、退職所得金額及び山林所得金額の合計額が第二章第四節（所得控除）の規定による雑損控除その他の控除の額の合計額を超える場合において、当該総所得金額、退職所得金額又は山林所得金額からこれらの控除の額を第八十七条第二項（所得控除の順序）の規定に準じて控除した後の金額をそれぞれ課税総所得金額、課税退職所得金額又は課税山林所得金額とみなして第八十九条（税率）の規定を適用して計算した場合の所得税の額の合計額が配当控除の額を超えるときは、第百二十三条第一項（確定損失申告）の規定による申告書を提出する場合を除き、第三期（その年の翌年二月十六日から三月十五日までの期間をいう。以下この節において同じ。）において、税務署長に対し、次に掲げる事項を記載した申告書を提出しなければならない。
Article 120 (1) If the sum total of a Resident’s gross income, retirement income, and timber income for the year exceeds the sum of any casualty loss deduction under Chapter II, Section 4 (Deductions from Income) and other deductions; and if the sum total of income taxes calculated when the Resident’s gross income, retirement income, and timber income less the aforementioned deductions taken pursuant to Article 87, paragraph (2) (Procedures for Deductions from Income) are deemed to be the Resident’s taxable gross income, taxable retirement income, and taxable timber income and Article 89 (Tax Rates) is applied, exceeds dividend tax credits, the Resident must file a return with the district tax office director during the third term (meaning during the period from February 16 to March 15 of the year following the year in question; hereinafter the same applies in this Section) giving the following information, unless the Resident files a return under Article 123, paragraph (1) (Filing Tax Returns Showing Losses):
So we have to finish Kakutei-shinkoku from February 16th to March 15th every year.
Any help?
There are many tools that offer us some easier way to do Kakutei-shinkoku procedure online. freee, Moneyforward, yayoi kaikei and so on.. but we still receive inquiries about Kakutei-shinkoku since none of these services specialized in tax filing do not provide information in English.
STARTUP JAPAN recently started services for Kakutei-shinkoku for entrepreneurs/freelancers/sole-proprietors as we started receiving many inquiries.
If you want to know the entire flow, we provide an hour session (¥10,000).
If you want to outsource the tax filing process to somebody, we connect with a good tax accountant, who’s digital-native and specialized in utilizing tax systems online (¥50,000+ for individual freelancers/sole-proprietors, ¥100,000+ for startups/incorporations).
Please access here and get the tax filing process done if you want to
SAVE TAX and SAVE TIME !!
