Taxes Payable in Japan for Foreign Companies and Others Conducting Business 外国の会社などが日本でビジネスを行った場合に日本に払う税金

【Koshida Accounting Firm Column Date:

”Life is really simple, but we insist on making it complicated.” ― Confucius 「人生は単純なのに、我々がそれを複雑にしようとしているのです。」- 孔子

three persons meditating


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.



How are taxes handled for foreign companies and individuals conducting business in japan?



1.Whether There Are Permanent Establishments in Japan 恒久的施設が日本にあるかどうか

Types of Permanent Establishments include:  恒久的施設には以下のような種類があります。

(1)A Fixed Place of Business (Business PE) 業を行う一定の場所(事業所PE)

This includes locations where business management takes place, branches, offices, factories, workshops, and other specific locations for conducting business. These refer to physical spaces where people work and where business activities are actually carried out, such as buildings, rooms, desks, etc.


(2)Long-Term Construction Projects (Construction PE) 長期の建設工事(建設PE)

Locations where building or installation projects, or the supervision of these, occur for more than one year.


(3)Contract-Signing Agents (Agent PE) 契約締結代理人(代理人PE)

Individuals or corporations who repeatedly sign contracts or play a major role in this process on behalf of the principal.



2.When There Are Permanent Establishments in Japan 恒久的施設が日本にある場合

If there are Permanent Establishments in Japan, the business must pay taxes on the profits earned in Japan.



3.Non-Permanent Establishments 恒久的施設にならないもの

Locations are not considered Permanent Establishments if the activities conducted there are only preparatory or auxiliary in nature. Examples include:

・Locations used solely for storage, display, or delivery of goods.

・Locations held solely for the purpose of purchasing goods or merchandise.

・Locations used solely for gathering information, such as liaison offices.

However, this only applies if the activities are preparatory or auxiliary and do not constitute the main business activities.









Our accounting and tax office has been actively assisting foreign business owners in Japan with accounting and tax matters. Also, not only in the tax and accounting field, our office can support your business in Japan in the fields of visa, registration, social insurance, and law by networking with specialists. Plus, we have networked with specialists in web marketing, building websites, and business consulting suitable for Japanese customers. All services are provided in English. Please feel free to reach out to us through the inquiry form.