Penalties for failure to file tax returns and requests for tax repayment in Japan are heavy and the rules themselves are complex with plenty of traps for the unwary.
Corporation tax filing and payment
Corporation tax returns are due within two months from the day following the last day of each tax accounting period end and should include the matters prescribed by the relevant jurisdiction tax office (in practice, this means it should be made on the required schedules). The amount shown as due on the return has to be paid. Also where a tax accounting period exceeds six months, then an interim tax return and payment is required. Read More
One of the most commonly asked questions in Japanese tax due diligence or risk assessment (including FIN48) is how the statute of limitations operates for Japanese tax purposes. There are some important differences between the Japanese system and the US and UK or UK based approaches, with some key points being as follows:
Comparing Japan to US and UK
In contrast to the US, where failure to file certain tax returns (such as those required by a permanent establishment of a foreign company in the US) can leave an open ended exposure that will not expire with time, in Japan the expiration of the statue of limitations over time will in due course mean that historic liabilities will fall out of the period allowed for assessment, although the timing is extended for failure to make filings when due. Read More