My accountant was here today and we finished the year-end taxes for the company. With “we” I mean that he did all the work producing all the documents for the tax office, and I signed a final document approving of what he has done. And this is why you need to have a trustworthy accountant: I have no idea, really, what I signed… Anyway, I assume he did the right thing since I will not have to pay taxes this year.
Okay, that’s a bit simplified: There are three types of taxes the company has to pay: Local/city, prefectural, and national taxes. The first two are – in part at least – taxes that are based on where the business is located, and you have to pay them regardless of whether you made a profit or not. This year it’s some 65.000 YEN for the privilege of owning a company in Kyoto.
National taxes are different – you pay them from company profits only. Since I am quite a bit in the reds, I don’t have to pay anything. In fact, I even received a tax return! And this is how:
The company owns a bank account, on which interest is paid, albeit very little. From this interest, I have to pay capital gains tax, which is automatically deducted by the bank and sent to the tax office. Now, the amount of national tax you have to pay “manually”, so to speak, is reduced by this capital gains tax. But since I don’t have to pay national tax this year, I have overpaid, and will receive that money back. Got it?
Long story short: I will receive a tax refund. The amount is a breath-taking 49 YEN (about 0.30 EUR). Yes, I know: the banking fees alone must be a multiple of this. At that rate, I can buy myself a celebratory cup of hot chocolate in about 7 years. Not that immigration will allow that, since I must make a profit in the second business year at the latest, or else… But that’s another story.