Step 1 shows you how to fill out the reverse side, the “Receipts & Expenses From (Back)”. To download a blank English version of this Japanese tax document in pdf format, please go to our Tax Forms page >>>here< <<.
To download the complete (with numbers written in) Japanese tax form used in this example , please rightclick and save the image below.
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Be sure to go through all the pages in step 2!
1. Details Of Sales (Receipts)
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Name Of Customer: Company X
Location Of (customer’s) Business: 301 Yellow Mansion, 6-3 NishiShinjuku, Shinjuku Ku
Amount Of Sales: 175,000yen
Total Sales To Other Customers: 413,700yen
Total: 588,700yen
Sales (Receipts) refers to the income you have generated through you private business – for example, teaching Japanese students in your home or a cafe and receiving a cash payment. These cash payments are generally unrecorded, unless you gave your students a receipt. Either way, it’s not important. The amount you enter here is the same as what you put in Step 1 ”2. Revenue”. However there is a slightly more detailed breakdown. If you had one or two main students/companies which you taught, then put their name and address in the relevant columns and the amount of sales to each one (we used Company X, their address and sales as 175,000yen). The value of all other sales should go in the Total Sales To Other Customers section – we have 413,700yen. If you had no one particular main student, then only fill out the Total Sales To Other Customers column. Then input the Total – in our case, 588,700yen. NOTE: Do NOT put your regular employment income in here.
2. Details Of Purchases
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Purchases are for suppliers from whom you bought stock. n our example, our English teacher of Japanese students doesn’t actually have stock purchases. So this section is mostly blank. Otherwise, follow the guidelines as 1. Details Of Sales (Receipts) above.
3. Calculation Of Depreciation
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Depreciable Assets: Motorbike
Area or Quantity: 1
Acquisition Date: May, 2008 (Heisei “20″, 5th month)
Cost Of Acquisition: 1,200,000yen
Base Value For Depreciation: 1,200,000yen
Method: Teigaku
Useful Life: 3 years
Rate Of Depreciation: 0.334
Depreciation Months: 8/12 (8months, May-Dec inclusive).
Ordinary Depreciation: 267,200yen
Special Additional Depreciation: - (nil)
Total Depreciation: 267,200yen
Business Use: 50%
Includable Depreciation Expense: 133,600yen
Balance Of Undepreciated Value: 932,800yen
Depreciation is only for items purchased exceeding 100,000yen. Anything below that can be deducted as a one time expense. Anything above has to be depreciated over time. Items 100,000yen – 200,000yen are depreciated over 3years. Items over 200,000yen are depreciated over a specified number of years (ask at your local tax office for specific deprecation durations).
So, in our example, we purchased a motorbike in May for 1,200,000yen. Base value of depreciation is usually the same as the purchase price. Useful life is 3years, as specified in the table for a motorbike. Rate of depreciation is 0.334, again given by the table (but simply 1/3years). Since we purchased the bike in May, the Depreciation Months are only 8months, not a full year.
So, Ordinary Depreciation = 267,200yen (1,200,000 base value x 0.334 rate of depreciation x 8/12 depreciation months).
Total Depreciation is the same as Ordinary Depreciation.
We use the bike 50% for business (visiting clients, going to private English classes etc) and 50% for pleasure, so we can only deduct from our tax the 50% business proportion, so Includable Depreciation Expense is 133,600yen (267,200yen Ordinary Depreciation x 50%).
Balance of Undepreciated Value, 932,000yen, is just the Acquisition Cost, 1,200,000yen – Total Depreciation, 267, if the item was purchased during this financial year. If it was purchased before then, then the calculation should be the previous years Balance of Undepreciated Value minus this years Total Depreciation.
OK, glad that’s over!
4. Details Of Rents
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Landlord Name & Address: Yamada Taro, 5-15-203 Hiro, Minato Ku, Tokyo.
Land/Space Rented: Apartment, 25m2
Rent & Key Money Paid This Year: Key Money: 160,000, Rent: 960,000
Amount Includable As Necessary Expense: 560,000yen
Rent is a big deduction for most. In the box, you first put your Landlords Name & Address. If you are going through some sort of housing agency, just put that company name and address/phone number. In the Space Rented, write “apartment, 25m2 ” or ”apartment, 6tatami”. Then enter the Key Money and Rent paid for the ENTIRE YEAR, NOT MONTHLY. In our example, the monthly rent is 80,000yen, and the key money is 2months rent, very common for Japan apartments. Add them together, multiply by 50% (or what ever portion you feel is appropriate), and then put this figure into the Amount Includable As Necessary Expense. And there you have it! This value is the same as the rent expense put on the Front form earlier.
5. Details Of Interest & Discount Paid
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This is the Interest which you have paid on loans, generally used for leasing business equipment, such as computers or vehicles, etc. Left blank for most of you. If you do have a Japanese Loan or Finance, then fill out the sections – it’s pretty straight forward.
6. Special Conditions For This Year
Special Considerations For The Year: Transport Expenses are high because of business trips: Jan 7-14 USA, Feb 8-11 Hokkaido, Oct 28 – Nov 13 Hong Kong & Thailand.
Special Conditions is useful for any extra info which you think could be useful to explain some of your entries. If your travel expenses for example are unusually high due to international or domestic Japanese travel, then make a mention of it. See our example. You don’t need much more detail than that, and it’s fine to use English. Remember though, you should only claim business related trips, not just any vacation you have. It is also possible to claim a trip as 50% business, 50% pleasure etc.
Time for Step 3…