International Tax Affairs
We, SU Partners Tax Corporation, have supported over 120 foreign-affiliated “inbound” companies and Japanese “outbound” companies build their businesses in Japan and foreign counties since our establishment in 1999.
In this globalized business environment, it is becoming more and more common that small and mid-sized companies are engaged in international business.
If you are a large corporation doing business globally on a daily basis, there would be no problem to deal with international business transactions internally, but it might be sometimes difficult for small and mid-sized companies to deal with such transaction by themselves. Therefore it is a quite normal to outsource such thing to an accounting firm that has the expertise.
Large accounting firms usually have a special department to deal with this kind of needs. The quality of their services is very high, but their fee is always costly as well.
Considering this situation in terms of cost performance for small and mid-sized companies, we provide them with the services of reasonable prices by collaborating with our partners and offshore offices.
Please feel free to contact us if you would like to hear more details.
What is International Tax and Accounting?
They are any business, investment, or money transactions between two and more countries and tax issues arising from such transaction.
There would be a case like a subsidiary of a Japanese company earns a profit in a foreign country and paid a tax on it there, but the parent company in Japan needs to declare the profit in Japan.
There would be also cases such as the pricing for particular products or services to a foreign subsidiary is not right in term of Japanese Tax Law and the tax authority in Japan regards this as a failure to declare the right amount of income or due to some errors in dealing with consumption tax for imported goods, the tax authority request the additional tax payment.
It is considered that tax accountants who can handle this kind of tax affairs are limited among all the tax accountants in Japan and this is a specific area for them.
You can avoid or minimize such tax risk by a right advice and consultation by a professional who has the expertise.
However, any enterprises have a priority to business activities and it quite often happens that the international tax issues are put off till later. Then, sometimes, these tax issues left behind becomes big troubles not only for your company in Japan but the parent / subsidiary companies abroad and end up with taxation on both entities.
Don’t be hesitant to ask us for any international tax issues you are facing, not saying “let’s put it off til later”.
Accounting/Tax Services for Inbound Foreign Company
Preparation of Financial Statements and Consulting for International Tax Affairs
You can enter into Japanese Market by setting up your legal entity with various types such as branch, limited liability corporation or by you residing abroad and investing properties or purchasing shares of a company in Japan and how you enter to Japanese Market would affect on your tax affairs in Japan.
We would engage not only in bookkeeping, a preparation of financial statements and tax returns according to the type how you do business in Japan, but also in helping the parent company consolidate the financial report from Japan into global financial report or in any consultation regarding international tax affairs between Japan and other countries arising from global business activities.
For Examples…
- Manufacturing company in Japan, which is a subsidiary of Public Traded Company in Europe
- Japan Branch of Manufacturing company in North-Europe
- Japan Branch of British personnel exchange services
- Japan Branch or Subsidiary of Property Investment Company in Middle-East
- Stock / Property Investment Company established by a family owned financial group in Hong Kong
- Subsidiary of Investment Trust Company of British Financial Institute
- Subsidiary of Financial Institute in the US
- Subsidiary of a public traded precision equipment manufacturer in Taiwan
- Subsidiary of Chinese manufacture of auto parts or property investment company
- Japan Branch of French Satellite Company
Are You in Trouble with Problems like These?
① We just established our Japan subsidiary but can not have time to take care of back-office works, prioritizing our sales force in Japan.
② We got audited by the Tax Agency and were asked for a lot of amounts of additional taxes as the result. We can not report it to the HQ. To prepare the future tax risks, we would like to change the tax accountant.
③ The communication with the parent company has not been well. I am not familiar with tax issues because I am originally a sales person. I need a support from a professional who has the expertise in this area.
④ I would like to invest in properties in Japan and am seeking a specialist who has a savvy knowledge and experience in a scheme using an anonymous association or a foreign company directly owning properties in Japan.
We Can Support You
1. Establishment of a Legal Entity in Japan and support for back-office work
2. Tax Advice / Consulting for International Tax Affairs (Consumption Tax, Tax Convention, Thin Capital Taxation)
3. Support for financial reports to the parent company abroad
4. Measurement for Transfer Pricing
5. Full Support for defining investment scheme by a foreign investor
Consultation on Tax/Accounting Issues for Foreign Companies Coming to Japanese Market in the Near Future
At the requests from Japan External Trade Organization (JETRO) in Yokohama, Kanagawa-prefecture, we have offered over years consultations to foreign companies considering to enter Japanese Market.
For Example…
- Which type of legal entity in Japan is best suited for your business in Japan, like branch or LLC, or Kabushiki Kaisha(KK) etc.
- Question for bookkeeping. It must be done in the way suited for financial report to the HQ and for the tax declaration in Japan.
- How you should do with Financial Institutes in Japan
- Should you do business with your customers in Japan through the subsidiary in Japan or should they do business directly with the parent company abroad?
- Importing and issue of consumption tax on imported goods.
- How to hire a Japanese employee
- Should your bookkeeping be done in a foreign currency or Japanese Yen?
- Should you apply Japanese GAAP or your country’s GAAP?
- If you enter to Japanese Market by establishing your subsidiary in Japan, should you make the share investments or make the loan to the subsidiary?
- How should you do when your business point in Japan is pointed out as an entity equivalent to a branch of the parent company abroad and is asked for corporate tax filing and tax payments by the Tax Agency?
If there is foreign staff arriving Japan, you have to be careful of how to deal with their salary. At a tax audit, sometimes it becomes one of the focuses pointed out by the tax authorities
Taxation in Japan to Bonus or Incentives （Stock Option or Restricted Stock) and Fringe Benefit
For Example…
- Staying Period affects the rage of taxation
- Americans need to file their returns in the US wherever they live
- We can help you file the US tax return in cooperation with our partner.
- How taxation would be different for salaries paid in Japan and your country?
Outbound Accounting/Tax Services for Japanese Company Investing/Entering to Foreign Market
Effective Investments in Japan and Foreign Countries and Business Development
When you export goods or invest to foreign counties, the taxation coming from these transaction would be varied depending on how you do. You need to assess the whole process of how you collect the profit at the end and seek a way to avoid the double taxation and develop the business effectively.
For examples, we have consulted issues like below
- When a domestic corporation exports goods through a subsidiary in a foreign country, which plays a role as a distributor there, how you should treat in terms of taxation in Japan when the domestic corporation receives a part of the profits the subsidiary has accumulated as a dividend?
- What is the range of Tax Heaven Taxation that you are taxed on the profits earned by a subsidiary you established in a tax heaven area where the tax rate is relatively lower than that in Japan and what is the range of Tax Heaven Taxation not applied?
- From the viewpoint of Transfer Pricing Taxation, when a domestic corporation exports products or provide with services through a foreign subsidiary, you need to check in advance whether or not the domestic corporation sets the profit rate low by transferring its income to a foreign subsidiary with its price adjustments.
- How to make a contract with a customer in a foreign country for indemnifying the risk arising from a evaporate exchange currency market?
- How to set Salary Regulations for an employee who is assigned to a foreign subsidiary?
- How many portions should a domestic corporation owe for a salary of an employee who is assigned to a foreign subsidiary?
- When you invest in a foreign country, how is the tax rate going to be after the tax convention is applied.
Are You in Trouble with Problems like These?
①I appreciate my tax accountant helping our business from the start but it seems he is not familiar with any international tax affairs.
②The decision to go abroad was made but we are still looking for a trustworthy accounting firm in the foreign country where we establish our subsidiary.
③We assign accounting / tax issues of our foreign subsidiary to a tax accountant at a big accounting firm, but because we are a small company, it seems that a skilled professional is not assigned to us. Whenever we ask our tax accountant, he always says he would come back later and he is not reliable enough for us.
We Support You
1. Reference to Tax professionals in a foreign country
2. Advice and consulting for international tax issues like consumption tax, tax convention, tax heaven taxation
3. Support for financial report from a foreign subsidiary to a domestic parent company
4. Measurement for transfer pricing
