Economy Income Tax and Private Residential Tax Guidebook Revised December 2023 / Akio Matsuoka / Tomohiro Akiyama

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Economy
[Introduction to Contents]
This report describes and explains income tax, inhabitant tax, and enterprise tax for individual income by the same income category and the same item, and it is edited so that national tax and local tax can be understood together. There is an index at the end of the book for more convenient use.
● Income tax, inhabitants tax, and enterprise tax are summarized and explained by income classification and common items, and are edited so that the relationship and taxation method of national and local taxes on personal income can be understood together!
● All pages are edited in a table format so that it is easy to read, and the explanation is explained in an easy-to-understand manner with figures and tables!
● A quick calculation table that lists the amount of income tax and Private Residential Tax is created!
● There is a list of the differences between income tax and Private Residential Tax!
● There is a list of the requirements for each special case of capital gains and a list that allows you to check at a glance whether it can be applied redundantly or not!
● It is edited so that the calculation of income tax, inhabitants tax, and enterprise tax can be understood together.
● As a guide to understand the structure of the system, the legal foundation of the Income Tax Act and the Local Tax Act are cited in the explanation, and various tax amount tables are included for use as a practical manual of tax calculation!
[Contents]
(I) Taxpayer and tax payment place
1 Taxpayer of an individual
2 Taxation on non-residents
Reference Tax Exemption for Temporary Residents (183 day rule)
Inhabitant Tax (if there is a period of non-resident within the previous year)
Reference Tax payment place
Reference Tax payment place
Reference Tax payment place
Reference Tax payment place
Reference Tax payment place
Reference Tax payment place
Reference Tax payment place
Reference Tax payment place
Reference Tax payment place
Reference Tax payment place
Reference Tax payment place
Reference Tax payment place
Reference Tax payment place
Reference Tax payment place
Reference Tax payment place
Adjustments
6 Translation of foreign currency denominated transactions
? What are foreign currency denominated transactions? Translation of foreign exchange into Japanese yen? Special provisions for translation into Japanese yen under forward foreign exchange contracts? Translation of foreign currency denominated transactions pertaining to the profit and loss statement, etc. of a person who conducts business outside Japan
Reference When exchange gains or losses should be recognized
(iv) Interest income
1 Significance
2 Calculation of income amount
3 Point of income classification
4 Scope of specified public and corporate bonds
5 Method of taxation on bonds (including Special Income Tax for Reconstruction) 31.1.1 Private Residential Tax Taxpayer Taxpayer Salaried workers
? Taxation on interest on bonds? Taxation on interest on foreign bonds? Taxation on interest on foreign bonds? Taxation on interest on foreign-issued bonds? Water-based withholding scheme? Application of Foreign Tax Deduction? Conversion date of interest on foreign bonds? Taxation on interest on other bonds
6 Non-taxable
? Non-taxable scheme for interest income from persons with disabilities? Other
7 Timing of recording income
5 Dividend Income
1 Significance
2 Calculation of income amount
3 Points of income classification
4 Timing of recording income
5 Calculation of interest on liabilities incurred for acquisition of principal
6 Taxation method
? Dividends, etc. (excluding dividends, etc. as described in the following?) (including Special Income Tax for Reconstruction) Definition of individual large shareholders? Private placement (overseas private placement) Dividends, etc. related to the distribution of profits from public and corporate investment trusts, etc. or dividends, etc. from overseas investment trusts, etc. (including Special Income Tax for Reconstruction)
Reference Range of Dividends, etc. from Listed Shares, etc.
Reference Selection of Taxation Method for Dividends, etc. from Specified Listed Shares, etc. (up to 2022)
Reference designated account Details of the Breakdown of Dividends in the Annual Transaction Report
Reference NISA fundamental expansion and Making the NISA System Permanent
Reference : 7 Revision of Tax Exemption Measures for Dividend Income and Capital Gains, etc. Pertaining to Small Amount Listed Shares, etc. in Tax Exempt Accounts
8 Unification of Taxation Methods for Income and Resident Tax
? Dividends, etc. from Specified Listed Shares, etc. (excluding large individual shareholders) Small dividends on unlisted stocks, etc. (equivalent to or less than 100,000 yen per year) (including Special Income Tax for Reconstruction)
9 Deemed Dividends
? Significance? Examples of Income Calculation? Relationship between Deemed Dividends and Capital Gains or Losses on Transfer of Securities? Recognition of Deemed Dividends only for No-Consideration Reorganization? Exclusion of Deemed Dividends? Special Provisions on Taxation on Certified Shares Distribution
Reference Outline of Tax System for Combined Foreign Subsidiaries (CFC Tax System) (40-4 and 66-6 of the Act)
6 Real Estate Income
1 Significance
2 Calculation of Amount of Income
3 Points of Income Classification
4 Business size and Non-business size
2 Economic profit such as security deposit from establishment of fixed-term land lease right? Major differences between whether or not real estate loans are of business size? Judgment of whether or not real estate loans are of business size
4 Business Tax (Real Estate Lending Business and Parking Business)
Reference Certification Criteria in Tokyo
6 Necessary Expenses
? Points of Necessary Expenses Classification? Insurance Premiums for Debt Determination Standard
8 Household Expenses, Household Expenses, etc.
9 Taxes and Public Dues
? Classification? Timing of Inclusion in Necessary Expenses? Amount of interest tax included in necessary expenses
Reference : Treatment of fixed property tax on business assets related to inheritance, etc.
10 Compensation for damage, etc.
11 Penalties, etc.
12 Overseas Travel Expenses
13 Valuation of inventory assets
? Principle? Valuation of damaged inventory assets
? Valuation of cryptoassets
? Depreciation of depreciable assets
? Depreciable assets
? Assets not subject to depreciation
? Depreciation of depreciable assets
? Depreciable assets
? Depreciation of depreciable assets
? Depreciable assets
? Assets not subject to depreciation
? Depreciation method of depreciable assets
? Depreciable assets
? Residual value of depreciable assets
? Depreciable assets
? Capital expenditures
19.3.31 19.4.1 2008 2008 2012 Miscellaneous Income Tangible Depreciable Assets Intangible Depreciable Assets (iii) Calculation of Depreciation Allowance for Assets with Partial Demolition, etc. (iv) Calculation of Depreciation Allowance in the Case of Capital Expenditure (iii) Calculation of Depreciation Allowance in the Case of Conversion of Non-Business Assets to Business
(a) Selection of depreciation method (ii) Selection of depreciation method (iii) Change of depreciation method (iii) Statutory depreciation (method (iii) Statutory depreciation (iv) Change of Depreciation Method
(a) Inclusion of Acquisition Costs of Small Depreciable Assets in Necessary Expenses
(a) Special Provisions on Inclusion of One Time Depreciable Assets in Necessary Expenses
(a) Special provisions on Inclusion of One Time Depreciable Assets in Necessary Expenses
(a) Special provisions on Inclusion of One Time Depreciable Assets in Necessary Expenses
(a) Special provisions on Inclusion of One Time Depreciable Assets in Necessary Expenses
(a) Special provisions on Inclusion of One Time Depreciable Assets in Necessary Expenses
(a) Special provisions on Inclusion of One Time Depreciable Assets in Necessary Expenses
(a Calculation of the Amount of Full-Time Employees' Salary Included in Necessary Expenses
Reference Treatment of Consumption Tax
Inhabitant Tax and Enterprise Tax (The Difference in Treatment of family employee exclusively engaged in the business of blue income tax return filers's Salary from Income Tax)
Inhabitant Tax and Enterprise Tax (Treatment of Deduction for Full-Time Employees)
22 Inhabitants Tax (Blue Return Sepcial Deduction in the case where a person who is not obliged to report income tax only reports income tax)
Enterprise Tax (Treatment of Blue Return Sepcial Deduction)
23 Special Provisions on Necessary Expenses for Social Insurance Medical Fees
? Details? Requirements? Classification of Necessary Expenses
Enterprise Tax (Treatment of Social Insurance Medical Fees)
24 Special Provisions on Necessary Expenses for Domestic Workers, etc.
25 Income Calculation for Members of Voluntary Unions, etc.
? Method of Income Calculation? Timing of Attribution of Profit and Loss
27 Special Provisions on Income Calculation for Business Income, etc. of Members of 2007.4.1 341 10.1.1 8.3.31 Petty Sum Depreciable Assets Sepcial Deduction medical equipment family employee exclusively engaged in the business of blue income tax return filers
29 Processing of Consumption Taxes
? In the case of the accounting method with tax included? In the case of the accounting method without tax? Deemed purchase rate of consumption taxes (for those who choose the Simplified Taxation system)
Reference Handling of Consumption Taxes on decedent (in the case of the accounting method with tax included)
30 Gradual increase of consumption taxes and transitional measures
30 Reduction of consumption taxes and transitional measures
Reference Outline of the Method of Storing Qualified Invoices, etc. (Outline of the Invoice System)
Reference Review of the Method of Storing Qualified Invoices, etc.
Reference Review of the Method of Storing Electronic Books, etc.
8 Employment Income
1 Significance
2 Calculation of Income Amount
4 Point of Income Classification
5 Amount of deduction for employment income
Reference Quick Calculation of Employment Income
8 Stock Options (SO), etc.
? Taxation categories related to SO (non-tax-qualified and tax-qualified)? Income category in the case of receiving the right to acquire shares, etc.
Attachment
8 Stock Options (SO), etc.
? Taxation categories related to SO (non-tax-qualified and tax-qualified)? Income category in the case of receiving the right to acquire shares, etc.
8 Stock Options (SO), etc.
? Taxation categories related to SO (non-tax-qualified and tax-qualified)? Income category in the case of receiving the right to acquire shares, etc.
8 Stock Options (SO), etc.
? Taxation categories related to SO (non-tax-qualified and tax-qualified)? Income category in the case of receiving the right to acquire shares, etc.
8 Special Transfer Restricted Stock Units (RSU) - Income from transfer of the right to acquire shares, etc. provided by the issuing corporation? Specific Restricted Stock Compensation Plan (RSU) - Employee stock purchase plan (ESPP)
9 Salary and Economic Profit in Kind
? Treatment of special and in-kind salary? Other tax treatment of in-kind salary and economic profit? Principle of evaluation of salary in kind
10 Withholding 2024 2024 Adjusted Deduction Deduction for Specific Expenditures Deduction for Specific Expenditures Record of Withholding Income Tax
2 Cases that do not constitute retirement income
3 Calculation of the amount of income (paid on or after January 1, 2013)
? Cases where either general retirement allowance, etc. or specific officer retirement allowance, etc. is paid
? Cases where both general retirement allowance, etc. and specific officer retirement allowance, etc. are paid in the same year
? Taxation on short-term retirement allowance
4 Retirement Income Deduction
? Calculation of Retirement Income Deduction? Calculation of length of service
5 Timing of recording income (for taxable year)
Inhabitant tax (special provisions on the timing of taxation of retirement income)
6. Withholding (special collection)
? Declaration on Receipt of Retirement Income? Sources for 2021 when a declaration on Receipt of Retirement Income (Retirement Income Declaration) is filed (special) Quick Calculation Table of Tax Collected? Source of Income Tax in Case of Non-Submission of Declaration Form for Receipt of Retirement Income (Retirement Income Declaration Form) (Special) Tax collected? Source (Special) Payment of collected income tax and inhabitant tax? Taxation on retirement income at the option
Inhabitant tax (submission of "Retirement Income Declaration Form")
Reference Systems for Short-term Retirement Allowance
10 Forest Income
1 Significance
2 Special Cases where Forest Income is Taxable
3 Forest Income without Income Tax
4 Calculation of Amount of Income
5 Necessary Expenses
? Cost accounting method? Estimated expense ratio method
6 Special Cases where Tax Amount is Reduced
? forest plan Sepcial Deduction? Expropriation, etc.? Bad debt of transfer proceeds? Performance of guarantee obligations
7 Calculation method of tax amount (including Special Income Tax for Reconstruction)
(xi) Capital Gains (Comprehensive Taxation)
1 Target Assets
2 Calculation of Amount of Income
Special Provisions for Exchange of Revenue Amount, Acquisition Cost, Transfer Cost, and Sepcial Deduction
Reference Taxable Income by Mode
3 Long - and Short-term
Business Tax (Loss On Transfer of Business Assets)
Reference Taxable Income Category
2 Calculation of Amount of Income
special case of Sepcial Deduction of yen
? Sale of land for a specific residential area development project, etc. ; special case of Sepcial Deduction of 5 million yen
? Sale of land, etc. for rationalizing the holding of farmland ; special case of Sepcial Deduction of 8 million yen
? Sale of land, etc. for rationalizing the holding of farmland
? Sale of land, etc. for a specific period
? Sale of land, etc. for a specific period
? Sale of land, etc. for a specific period
? Sale of land, etc. for a specific period
? Special case
? Special Provisions on Addition to Acquisition Costs for Inheritance Tax
Taxation on Individual Shareholders in the Case of Share Distribution
3 Taxation on Capital Gains, etc. of Claims
3 Income Category of Stock Transactions in a Discretionary Investment Account (Wrap Account)
4 Income from the Transfer of Securities other than Stocks that are not subject to Capital Distribution
5 designated account Scheme
? Overview of the Scheme
? Major listed stocks, etc. that can be accepted Special Provisions
? Special Provisions on Calculation of Income Related to Transfer of Shares in Exchange for Shares
? Special Provisions on Taxation on Share Exchange
? Special Provisions on Taxation on Authorized Share Distribution
? Special Provisions on Transfer of Shares for Performance of Guarantee Obligations
? Special Provisions on Addition of Acquisition Costs for Inheritance Tax
? Special Provisions on Taxation Accompanying the Promotion of M & A under the Companies Act
2.4.1 000 5 million 2016 000 000 000 000 000 000 fire-resistant building Sepcial Deduction Sepcial Deduction Sepcial Deduction Sepcial Deduction Sepcial Deduction Separate Self-Assessment Taxation Separate Self-Assessment Taxation Dividend Income Contribution Deduction Separate Taxation Sepcial Deduction Sepcial Deduction Sepcial Deduction Sepcial Deduction designated account designated account designated account Land Readjustment Project Land Readjustment Project Land Readjustment Project Land Readjustment Project Land Readjustment Project Uchiho Tax Payment Deferral System under the Income Tax Transfer System
Reference Method for Calculating the Value of Target Assets
14 Occasional Income
1 Significance
2 Calculation of the Amount of Income
3 Points of Income Classification
Reference company issued points Taxation when used
4 Taxation method (including Special Income Tax for Reconstruction)
5 Non-taxable
6 Amount of revenue
? Timing of recording revenue? Valuation of revenue (recorded amount)
7 Amount spent to obtain revenue
? Principle? In the case of lump-sum payment based on a life insurance policy or maturity refund based on a non-life insurance policy? In the case of receiving survival benefits based on a term insurance policy with survival benefits? In the case of receiving liquidation money after reducing the insured amount of lump-sum payment endowment insurance? In the case of concluding a sales contract based on an intermediary contract and receiving earnest money? In the case of donation
15 Miscellaneous Income
1 Significance
2 Calculation of income amount
Examples of 3 Miscellaneous Income
Reference Income Classification of Business Income and Miscellaneous Income, etc. from Operations
Reference Income Classification of Revenues from Power Sales by Solar Power Generation Facilities
Reference Income Classification of Non-SubstituTable Token (NFT) and SubstituTable Token (FT)
Reference Income of Minpaku (Residential Accommodation)
4 Taxation method
5 Timing of recording revenue
6 Income related to Crypto-Assets
Timing of recording revenue? Acquisition cost? Calculation of transfer cost, etc.? Notification or application for selection of valuation method
Reference Recognition of income related to Crypto-Assets and acquisition cost (Bitcoin)
7 Non-taxable
8 Public pensions
? Scope of public pensions? Timing of recording revenue? Calculation of acquisition cost? Calculation of transfer cost, etc.? Notification or application for selection of valuation method
Reference Recognition of income related to Crypto-Assets and acquisition cost (Bitcoin)
8 Public pensions
? Scope of public pensions? Timing of recording revenue? Quick calculation of Miscellaneous Income related to public pensions
Reference Treatment of retroactive receipt of public pensions
<2019 Miscellaneous Income Calculation of Miscellaneous Income for Annuities Based on Insurance Contracts
? In cases other than the following?
In the case of a pension related to inheritance
Reference Allocation of taxable and non-taxable portions of insurance pensions
10 Inclusion of reduced foreign income taxes in gross revenue
11 Special Provisions on Taxation of Miscellaneous Income, etc. Related to Futures Transactions
? Significance of Futures Transactions? Amount of Miscellaneous Income, etc. Related to Futures Transactions? Amount of Miscellaneous Income, etc. Related to Futures Transactions? Amount of Special Income Tax for Reconstruction, etc. Related to Futures Transactions?