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Japanese taxation to a foreign corporation differs depending on whether the foreign corporation has a permanent establishment (PE) in Japan. This article summarizes taxation to a foreign corporation having PE in Japan.

Under the Japanese corporate tax law, many tax benefits are only granted to a corporation with “blue form tax return” status, so-called “Aoiro-Shinkoku(青色申告).” Here is a summary of the blue form tax return system in Japan.

Under the Japanese tax depreciation rule, fixed assets should be depreciated over useful lives stipulated under the tax law regardless of the useful life for accounting purposes. However, there are some de-minimis rules. We summarize general rules on depreciation under the Japanese tax law.

For Japanese tax purposes, deduction of director remuneration is restricted.  It is only deductible if it follows the rules stipulated under the tax law. We summarize general rules on deductibility of director remuneration. 

A foreign corporation can conduct the business through a Japanese subsidiary or a Japanese branch of a foreign corporation. Subsidiary and branch are taxed similarly; however, there are some differences. Below is the summary of the key features and differences between Japanese subsidiary vs. branch.