The Penalty for Filing Late Tax Returns in Japan
【Koshida Accounting Firm Column Date:】
Penalties for Late Tax Filing in Japan
Hi, my name is Taisei Koshida, and I am a certified public accountant and licensed tax accountant in Japan.
I support non-Japanese business owners and individuals who need to file tax returns in Japan and may find it difficult to deal with Japanese tax matters, especially when language is a barrier.
If you find the Japanese tax system confusing, I can help you handle your tax filings smoothly.
If you are unsure about the penalties for failing to file a tax return in Japan, this article may be helpful.
Voluntary Filing After the Due Date
If you file your tax return voluntarily after the due date but before any tax audit, the penalty is generally 5% of the unpaid tax.
For example, if the unpaid tax is JPY 1,000,000, the penalty would be JPY 50,000.
Filing After a Tax Audit
If the failure to file is identified during a tax audit, the penalty increases to 10% or 20% of the unpaid tax, depending on the circumstances.
In cases where the failure is considered intentional, a heavier penalty (often referred to as a surtax) of up to 40% may be imposed.
Interest Charges
In both cases, interest will be charged on the unpaid tax.
The rate depends on the statutory interest rate applicable at the time.
Frequently Asked Questions
What happens if I file my Japanese tax return late?
If you file your tax return after the deadline, you may be required to pay a late filing penalty in addition to the tax you owe. Interest charges may also apply depending on how late the return is filed.
What is the penalty if I file voluntarily after the deadline?
If you voluntarily file your tax return before the National Tax Agency contacts you or starts a tax audit, the late filing penalty is generally lower than if the tax office discovers the omission during an audit.
What happens if the tax office discovers the late filing during a tax audit?
If your failure to file is identified during a tax audit, the late filing penalty is generally higher. In more serious cases, such as intentional tax evasion, substantially heavier penalties may be imposed.
Will I also have to pay interest on the unpaid tax?
Yes.
In addition to any late filing penalty, interest charges generally accrue on the unpaid tax from the original due date until payment is made. The applicable interest rate is determined by law and may change over time.
Can I go to jail for not filing a tax return in Japan?
Generally, no.
Most late filing cases result in financial penalties rather than criminal prosecution. However, intentional tax evasion, fraudulent tax returns, or other serious violations of the tax laws may result in criminal penalties in severe cases.
Can your office help if I have missed the filing deadline?
Yes.
We regularly assist foreign individuals and business owners who have filed late or have not yet filed their Japanese tax returns. We can help you prepare the necessary returns, communicate with the tax authorities when appropriate, and minimize penalties wherever possible.
The information below may also be helpful.
Drawbacks of Not Filing Taxes in Japan
About Our Services
Our accounting and tax office has extensive experience supporting foreign business owners in Japan.
In addition to accounting and tax services, we work closely with trusted specialists to support your business in areas such as:
- Visa and immigration procedures
- Company registration
- Social insurance
- Legal matters
We also collaborate with professionals in web marketing, website development, and business consulting tailored to the Japanese market.
All services are provided in English.
Don’t navigate the Japanese tax system alone. Contact us today for a free consultation and ensure your business in Japan starts on the right financial footing.