AWI Tax Consulting

Services

Accounting service

  • Monthly work

    We book your daily transactions and prepare accounting reports, including trial balance. We can communicate directly with foreign parent companies and fit into your internal accounting software. In addition, we are glad to meet the tight report deadlines common to listed companies.

  • Year-end work

    We prepare your Financial Statements, Account Details, and Corporation Business Summary to be attached to the Corporation Tax return. Financial statements are prepared in both English and Japanese.

Tax service

  • Tax advisory service

    We basically support all issues related to Corporation Tax, Japanese Consumption Tax (JCT), and Japanese withholding tax. Below are some examples of the advice we provide to foreign-affiliated companies.

    • Differences in tax treatment for the Japan subsidiary and/or Japan branch
    • Preparation/review of service agreements that do not give rise to the possibility of permanent establishment risk in consideration of the BEPS MLI (Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting)
    • Arm's length prices for foreign-related transactions in consideration of transfer pricing rule (specific analysis of functions/risks and local file preparation will be supported by our affiliated transfer pricing experts)
    • Preparation of travel expense rules in consideration of tax deductibility
    • Advantages/disadvantages of JCT-return-filing-obliged status or non-JCT-return-filing-obliged status
    • Advantages/disadvantages of the Simplified JCT Calculation System
    • Withholding tax obligations and the exemptions under tax treaties and procedures required for the exemptions
    • Planning to avoid the application of Thin-Capitalization Rule
    • Global tax reduction by taking into account the corporate tax rate of the country where the foreign parent company is located and the Japanese Corporation Tax rate.
    Tax advisory fee
    USD250 excluding JCT (per hour)However, a fixed monthly fee is also available upon your request.
  • Preparation of Corporation Tax return and Japanese Consumption Tax return

    Based on our extensive experience in tax return preparation, we prepare appropriate tax returns. Below are the key points of AWI's tax return preparation work.

    [Corporation Tax]
    • Prepare English tax computations summarizing your Corporation Tax return.
    • If there is a tax package specified by the foreign parent company, prepare the package.
    • If the financial statements are prepared in accordance with foreign GAAP, GAAP adjustments are made to ensure that the Corporation Tax amount is calculated based on Japan GAAP.
    • Prepare schedules for Earnings Stripping Rule and Thin-Capitalization Rule.
    • Prepare schedule for foreign related party transactions (schedule 17-4).
    • To reduce the likelihood of tax audits, tax returns (and their attachments) are prepared to anticipate and address potential questions from tax officials.
    [JCT: Japanese Consumption Tax]
    • Prepare English tax computations summarizing your JCT return.
    • Application of the Simplified JCT Calculation System with consideration of its advantages/disadvantages
    • Application of JCT special mitigation measures in connection with the Japan Invoice System introduced in 2023
    • Claim JCT refunds for Japanese subsidiaries providing services to its foreign parent companies
    • Respond appropriately to inquiries from Japan Tax Office regarding JCT refund returns
  • Tax audit support

    AWI has extensive experience in supporting tax audits. Below are some of the key points AWI considers when supporting tax audits.

    • From the bookkeeping stage, we are aware of the possibility of tax audits in the future.
    • Admit the mistakes that need to be admitted (obvious mistakes), and negotiate with the tax inspector on the issues that need to be negotiated.
    • Accelerate the completion of the tax audit by submitting documents that satisfy the tax inspector's needs.
    • Consult with former employees of Japan Tax Office, if necessary.
    • Report the status and results of the tax audit to the foreign parent company.
  • Tax Representative work

    The following services are available to foreign companies that do not have a permanent establishment in Japan but are required to file a Japanese Consumption Tax (JCT) returns. These services are often used by foreign companies providing cross-border electronic services or importing and selling products to Japanese customers with DDP Incoterms.

    • Tax Representative service
    • Tax payment (cash handling) service
    • Preparation of JCT return

Company set-up support

We assist with the process of establishing subsidiaries in Japan. Foreign companies have options of establishing a Kabushiki-Kaisha, Godo-Kaisha, or Japan Branch. After understanding your situation and proposing the most appropriate form, we assist you through the legal process at the Legal Affairs Bureau, in cooperation with legal experts.

Virtual office

We offer a corporate registration address for foreign-affiliated companies. The registration location is within our secure building.
The use of our virtual office is limited to companies using AWI's tax or accounting services.

Monthly fee
15,000 yen excluding JCT
  • Once-a-week mail forwarding (except for long national holidays such as the New Year holidays).
  • The postage fee for mail forwarding is generally included in the monthly fee.
  • Shipping of large items, such as packages, will be charged at the actual cost, and the shipping destination must be within Japan only.

Bank account opening support

Despite a foreign parent company's reputable status in its home country, opening Japanese bank accounts for its Japanese subsidiary is often challenging. Due to concerns regarding money laundering and other regulatory issues, it can be even more difficult for foreign-affiliated Japanese subsidiaries compared to domestic companies. We are pleased to offer advice to help Japanese banks better understand your business and the necessity of opening a bank account.

HR service

  • Preparation of human resource regulations

    • Employee work rules
    • Wage regulations
    • Other HR regulations
  • Payroll

    • Monthly payroll calculation
    • Bonus payroll calculation
    • Year-end tax adjustment
    • Preparation of documents for Employment Insurance and Worker's Accident Compensation
    • Preparation of documents for Health Insurance and Welfare Pension Insurance

HR services are provided by AWI's affiliated Labor and Social Security Attorney.

Individual Income Tax

  • Tax advisory

    We basically support all issues related to Japanese Individual Income Tax. Below are some examples of the advice we provide to non-Japanese.

    • Determination of residency status, Permanent Resident, Non-Permanent Resident or Non-Resident
    • The scope of taxable income for each residency status.
    • Salary taxation in case the company pays expatriate's rent and utilities
    • Tax exemption for Short-Term Business Travelers under tax treaties
  • Preparation of Individual Income Tax (IIT) return

    We prepare appropriate IIT returns. Below are some examples of the key points for the preparation.

    • Deduction for dependents for non-resident relatives
    • Foreign Tax Credit (Eligibility of the FTC is reviewed carefully, especially for U.S. citizens.)
    • Income from foreign investments (foreign stocks, foreign real estate, etc.)

Fee

Our service fees vary depending on the individual situation and requirements of our clients, so please refer to the following to get a rough idea. The fees listed below exclude JCT.

  • Case.1A foreign company that is required to file its JCT return due to providing cross-border electronic services.

    AWI's services
    Tax
    • Tax Representative
    • JCT return preparation (total taxable sales are calculated by the client)
    • Tax payments (cash handling)
    Annual fee
    USD3,000
  • Case.2A Japanese subsidiary providing services to its foreign parent company.

    AWI's services
    Accounting
    • NA (handled by the client)
    Tax
    • Tax advisory (time and material)
    • Corporation Tax return and JCT preparation
    Annual fee
    JPY820,000(tax advisory fees are charged separately on a time and materials basis)
  • Case.3A Japanese subsidiary providing professional services to its foreign parent company and Japanese clients (with one employee).

    AWI's services
    Accounting
    • Bookkeeping (using foreign accounting software)
    • Monthly report (submitted by the middle of the following month)
    • Financial statements preparation
    Tax
    • Tax advisory (monthly fixed fee)
    • Corporation Tax return and JCT return preparation
    Annual fee
    JPY1,610,000
  • Case.4A Japanese subsidiary importing and selling automotive components (with four employees).

    AWI's services
    Accounting
    • Bookkeeping (using Japanese accounting software)
    • Monthly report (submitted by the middle of the following month)
    • Financial statements preparation
    Tax
    • Tax advisory (monthly fixed fee)
    • Corporation Tax return and JCT return preparation
    Annual fee
    JPY2,430,000
  • Case.5A resident having Salary income, Rental income from an apartment in Japan, and Capital gain from Japanese listed company stocks

    AWI's service
    Tax
    • Individual Income Tax return preparation
    Annual fee
    JPY378,000
  • Please note that the fees mentioned above are for reference purposes only, and the actual amount may vary depending on the client's specific situation and individual requirements.
  • A separate fee will be charged to clients in their first year of incorporation for the preparation of an initial set of notifications to be filed to Japan Tax Office.