View PDF version

May 2020 - Volume 3 No. 2

Actions With Tax in Japan to Cope With COVID-19 Pandemic *

To relieve taxpayers in Japan in the midst of various agony caused by COVID-19 pandemic, the director of National Tax of Japan announced on 6 March 2020, the deferral of the due date of filing several tax forms. The general period of deferral is one month. The deferral applies to individual income tax returns and covers the due date for tax payments. Several tax grants have been announced, as well.

Individual Tax

Due Date of Filing and Tax Payment

The due dates for filing the tax return form and for ordinary tax payment have been deferred to 16 April 2020. This restatement of due date is applied automatically to every taxpayer. No further action with local tax offices is required. Also deferred to 16 April 2020 is the due date for the Foreign Assets Report and the Assets & Liabilities Report.

The due date of filing other tax related forms has been suspended to 16 April 2020, also¹. These forms are listed in the following table:

Division	Procedure name
Income tax related	Income tax and special income tax for reconstruction
	Request for correction of income tax and special income tax for reconstruction
	Blue income tax return approval application
	Blue business full-time employee salary notification (change notification)
	Notification of withdrawal from income tax blue tax return
	Claim for income tax refund by carrying back net loss amount
	Report of depreciation method of depreciable assets of income tax
	Application for approval of change in depreciation method for income tax depreciable assets
	Notification of income tax securities and virtual currency evaluation methods
	Application for approval of change in valuation method for securities and virtual currency of income tax
	Notification of opening and closing of private businesses
Gift tax related	Gift tax filing
	Request for gift tax rectification
	Notification of tax payment at inheritance
Consumption tax (individual) relations	Tax return for consumption tax and local consumption tax
	Request for correction of consumption tax and local consumption tax
Other	Submission of foreign assets report
	Submission of assets and liabilities report

Due Date for Automatic Transfer Payment

	BEFORE	DEFERRED TO
Individual Income Tax	21 April 2020	15 May 2020
Consumption Tax ofSole Proprietary	23 April 2020	19 May 2020

The automatic transfer system is available only for Income Tax and Consumption Tax, both for Individual. For these taxes, an application form must be submitted to the local tax office prior to each due date.in order to activate the auto transfer.

Due Date for Income Tax Return for a decedent

The due date of the income tax return for the year of the decedent’s death is suspended to 16 April 2020. Payment of the tax is also deferred.

Exceptions to Deferral of Due Date

The due dates for the income tax issues below are not deferred.

• Individual income tax return for the year of relinquishment of Japanese residence. The due date is not later than the date of immigration
• Application for reduction on income tax prepayment. This form must be filed by 15 July 2020, or 16 November 2020.

Consumption Tax

The due dates of filing and payment for consumption tax of sole proprietor are deferred to 16 April 2020. Deferral is not applicable to specific notifications or to report a change in consumption tax status.

Withholding Tax

The due date for every withholding tax imposed on a sole proprietor is not deferred by this measure. However, a special deferral may be granted for good cause. A timely application is required in these cases.

Examples of good cause include the following facts.

• The taxpayer or relevant accounting staff has been infected or has had contact with anyone contagious.
• An outside accountant retained for preparation of the form has been infected.
• The taxpayer is present in a country outside of Japan and is travel is restricted from that country.
• The COVID-19 virus has prevented the ordinary operation of management functions.
• Accounting staff members are absent from work because they are parents to children whose schools have closed because of the COVID-19 virus.
• The business has cancelled its annual meeting because of the COVID-19 virus.
• The taxpayer has been ordered to shelter at home by the Sanitary Department or any medical facilities because of the doubtfulness of contagion.

Inheritance Tax

Though the due date for inheritance tax is not suspended in public, a special allowance of suspension would be granted to you if you have some good causes which hinder your tax filing and tax payment in time. No preliminary action is required, but just put the words “Application of suspension of filing and payment caused by novel corona virus” on the first page of your inheritance tax form package.

Local Tax

A taxpayer can apply for an extension in relation to each local tax, such as inhabitant tax on individuals, fixed assets tax (property tax). The extension may be granted if the delay results from good cause that that prevents timely payment. A timely application to the local tax department is required.

Corporate Income Tax

Though the due date for corporate income tax is not suspended, a special allowance of suspension would be granted if you or your corporation have some good causes which hinders your tax filing and payment in time. No preliminary action is required, but just put the words “Application of suspension of filing and payment caused by novel corona virus” on the box of corporate name on the first page of your corporate tax form package.

But, as for the deferral for Business Tax filings and payments imposed by local prefectures including Tokyo, you need to submit an application form no later than 45-days after the end of the fiscal year of the corporation, to the prefectural tax office.

---

¹ https://www.nta.go.jp/taxes/shiraberu/shinkoku/kansensho/tetsuzuki.htm.

Legal Disclaimer