Filing Tax Returns in Japan: Importance of Blue-Form Submission and Deadline Compliance

Hi, my name is Taisei Koshida, and I am a certified public accountant and tax accountant.

I aim to assist non-Japanese business owners who struggle with reading or writing in Japanese. If you find the Japanese tax return system challenging, I can help you with your tax filings.

If you are unsure about Bleu-Form Tax Return in Japan, this blog can be helpful for you.

Blue-Form Tax Return in Japan

Both individuals and companies operating businesses in Japan need to be aware of the Blue-Form Tax Return system. Choosing to file taxes through this method provides certain benefits. However, it also entails additional obligations, such as maintaining double-entry bookkeeping and providing more detailed information. Adhering to the designated filing deadlines is crucial to maximize the advantages of the Blue-Form Tax Return.

The Advantages of Blue Tax Return

・Carrying Over Losses You can offset past losses against current profit (Individuals – 3 years, corporations – 10 years)

This is particularly beneficial for startups that tend to incur losses initially, as it can help reduce their overall tax burden.

・Avoiding Assumed Taxation( for both individuals and corporations)

If you don’t opt for the Blue form tax filing, tax authorities can more easily impose presumed taxation. This means they can mandate taxpayers to pay taxes based on assumptions made from information like competitors’ average information.

・Assets purchased for less than 300,000 yen can be expensed in one year( for both individuals and corporations)

If you opt for the Blue form tax filing, small businesses with a capital amount of less than 100 million yen can treat the cost of assets priced below 300,000 yen as a one-year expense. Typically, assets costing more than 100,000 yen would need to be depreciated over several years, but this threshold has been raised.

・Income deduction of 650,000 yen (for Individuals)

・Payments to family members can be claimed as expenses(for Individuals)

Things to Consider

・For Individual Business Owners
If you intend to file the Blue Tax Return, you need to submit the application to the tax office by March 15th during the tax year in question. Note that the deadline isn’t March 15th of the following tax year. If you are starting a new business, the application must be submitted within two months of starting the business.

・For Corporations

If you plan to file the Blue Tax Return, the application must be submitted to the tax office within the previous tax year. If you’ve established a new corporation, the application needs to be submitted within three months of its establishment.

If you are interested in taxes savings in Japan, please refer to the following.

Effective Ways to Save Taxes When Running a Business in Japan

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