Tax Accountant Tokyo - Outsourcing, Japan INBOUND - Yamajo International Tax and Accounting office.

【Working hours】9:00 ~ 18:00 (Japan time, GMT+8)

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Which is suggested Branch office or Subsidiary.

We often suggest to our potential clients that "Subsidiary is preferable to Branch office".

However your best position is depending on your company's environment. you should consult with your tax advisor before hand.

(Generally speaking)Subsidiary is suggested.

We suggest Subsidiary due to the below reasons.

1. From the capita per levy point of view, subsidiary is reasonable. (In case your head office's paid in capital figure is huge, you have to pay huge amount of local tax even though your Japan branch were a loss situation.)
2. Sized tax would be chargeable in case your paid-in capital exceeds JPY 100M.
3. Financial Statement of head office is required to file for Branch office when BO submit a tax return to the tax office. Subsidiary is not required to file shareholder's FS.
4. If your Japan branch is sued to a court, representative of Japan blanch can attend the court in Japan. In case of subsidiary, director of Japan subsidiary should attend.
5. Tax advisor's total fee for a Branch office would be expensive due to the additional jobs 2 and 3 above.
6. It tends to be thought that "a branch is easily liquidated than a subsidiary", however there is actually not so different of time scale and costs.

Local corporation tax (Per capita levy on corporate inhabitant tax) - Tokyo Metropolitan
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Category of corporation Main office is located within the 23 wards Other than left area
Capital Amount Number of staff   Metropolitan tax Metropolitan City
Over JPY 5,000,000,000 Over 50 JPY 3,800,000 JPY 800,000 JPY 3,000,000 
50 and below JPY 1,210,000 JPY 410,000
Over JPY 1,000,000,000
or under JPY 5,000,000,000
Over 50 JPY 2,290,000 JPY 540,000 JPY 1,750,000 
50 and below JPY 950,000 JPY 410,000
Over JPY 100,000,000
or under JPY 1,000,000,000
Over 50 JPY 530,000 JPY 130,000 JPY 400,000 
50 and below JPY 290,000 JPY 160,000
Over JPY 10,000,000
or under JPY 100,000,000
Over 50 JPY 200,000 JPY 50,000 JPY 150,000 
50 and below JPY 180,000 JPY 130,000
On and under JPY 10,000,000 Over 50 JPY 140,000 JPY 20,000 JPY 120,000 
50 and below JPY 70,000 JPY 50,000
Other than above JPY 70,000 JPY 20,000 JPY 50,000

Case 1: Branch office is preferable
(Indian company do IT development business in Japan)

Due to the double tax treaty of India and Japan, a branch office would be preferable.