More Taxes

Japan has an interesting system regarding the payment of taxes and social security, both for individuals and companies. The amount you have to pay each month does not depend on your current income, but on the income from the year before. And since the standard fiscal year for a company ends in March, the numbers for taxes and social security are calculated after that, and the new amounts have to be paid from July onwards.

Up until now, I have paid very little taxes on my income; I only had to pay national taxes to the amount of about 5000 yen per month. I would pay them twice a year only, accumulated for six months. However, now in the third year of my business, I also have to pay city and prefectural taxes on my income, which is another 5000 yen each per month. So, from one month to the next, my tax payment has tripled – and my income stayed the same, not to talk about my profits (for now).

Japanese currencyInterestingly, these two payments cannot be processed automatically using a collection order for the tax office for example. The reason is – as my accountant claims – that the monthly amount may fluctuate depending on the number of employees and their salaries. And the Kyoto city and prefectural tax offices, naturally, are by far not as advanced as my gas company for example and could not possibly know how to deal with this.

And since my bank denies me internet banking for my company account for some random reason, I will now have to make a pilgrimage before the 10th day of each month to my bank so I can pay my taxes there – in person and with a manually filled out piece of paper. So much for the highly advanced tech-country Japan. Well, I guess all the staff at my bank need something to do…

2 thoughts on “More Taxes

  1. I would have thought this is something you can pay via those amazing “pay everything you might ever have to pay” machines at Lawson & Co. O.o
    (I only used one to buy my Ghibli museum tickets :D)

    I hope your income keeps up with your tax payments. 🙂

    • Looking at the back of that payment slip, it does not appear so… Besides, going to my bank means I can have it directly deducted from my account and won’t have to use cash which may complicate my book keeping (I’m sure my accountant could keep up easily though 😉 )

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