Post-Incorporation Tax Compliance in Japan: A Checklist for Foreign Companies

Introduction

The incorporation of your Japan subsidiary is complete — but that marks the beginning of the compliance process, not the end.

After registration, your company is required to submit various notifications and applications to multiple authorities: national tax office, prefectural and municipal tax offices, pension office, and — for foreign-affiliated companies — the Bank of Japan. Each comes with its own deadline. Failing to file the Blue Form Tax Return Application by the prescribed deadline, for example, means your company will be ineligible for blue form status in its very first fiscal year, permanently forfeiting the associated tax benefits for that period.

This article provides a step-by-step checklist of the filings required after incorporating a Japan subsidiary. It covers national tax office filings (corporate tax and consumption tax), depreciation and inventory elections, local tax notifications, and social insurance formalities. Foreign-company-specific issues — including FEFTA reporting, tax treaty notifications before the first payment to the parent company, and transfer pricing considerations — are addressed in the final section.

Scope note: This article focuses on the post-incorporation implementation phase. For the tax decisions that should be made before incorporation — such as choice of entry form, capital structure, and pre-incorporation consumption tax planning — please refer to Pre-Incorporation Tax Checklist for Foreign Companies Setting Up in Japan.

Overview: Who to File With and When

The post-incorporation filings fall into five categories by recipient authority. The table below provides a high-level map before we address each in detail.

Authority	Key Filings	Approximate Deadline
National Tax Office (corporate tax)	Notification of Corporate Establishment, Blue Form Tax Return Application, Payroll Office Notification, and others	Mostly within 1–3 months of incorporation
National Tax Office (consumption tax)	Qualified Invoice Issuer Registration, Consumption Tax Taxable Payer Election, Simplified Consumption Tax Election	By end of first fiscal year
Prefectural / Municipal Tax Office	Corporate Establishment Notification	Within 15 days (Tokyo) to 2 months (varies by jurisdiction)
Pension Office / Labor Authorities	Social Insurance, Labor Insurance, Employment Insurance	Within 5 days (pension) to 10 days after hiring (labor)
Bank of Japan (foreign companies only)	FEFTA Inward Direct Investment Report	Within 45 days of registration date

The following sections address each category in order.

National Tax Office: Corporate Tax Filings

Notification of Corporate Establishment (法人設立届出書)

Deadline: Within two months of the incorporation date (i.e., date of registration)

This notification informs the tax office that a new legal entity has been established. There should be no penalty for non-filing, but failure to submit means the tax office will not send corporate tax return forms, payment slips, or other correspondence — which can create practical difficulties at the time of the first filing.

Required attachments include a copy of the articles of incorporation and a certified copy of the corporate registration (登記事項証明書).

Blue Form Tax Return Application (青色申告承認申請書)

Deadline: The earlier of (a) the day before the date three months after incorporation, or (b) the last day of the first fiscal year

This application is required for a company to file its corporate income tax returns as a “blue form” filer. While filing is technically optional, in practice every company should submit it. Blue form status is a prerequisite for a number of significant tax benefits, including:

• Loss carryforward for up to ten years (Article 57 of the Corporate Tax Act)
• Access to various tax incentives and credits

(English article on loss carryforward and carryback rules — coming soon; Japanese version available here)

Important: If this application is not submitted by the deadline, blue form status cannot be applied from the first fiscal year. The impact is irreversible for that period. This should be treated as an immediate priority upon incorporation.

Notification of Establishment of a Payroll Office (給与支払事務所等の開設届出書)

Deadline: Within one month of establishing the payroll office

This notification is required whenever a company establishes an office from which salaries or director compensation are paid. It applies even if only director compensation — and no employee salaries — is being paid.

Once this notification is filed, the company becomes a withholding agent for income tax purposes. Withheld income tax should generally be remitted to the tax office by the 10th of the following month.

Application for Special WHT Payment Schedule (源泉所得税の納期の特例の承認に関する申請書)

Deadline: No fixed deadline (effective from the month following the month of filing)

Under the standard rule, withheld income tax should be remitted monthly by the 10th of the following month. However, if the company has fewer than ten employees on a regular basis, it may apply for a special payment schedule that consolidates remittances into two annual payments:

• January–June withholdings: remitted by July 10
• July–December withholdings: remitted by January 20 of the following year

For a newly incorporated foreign subsidiary with a small initial headcount, this election can meaningfully reduce the administrative burden of payroll compliance. Note that if the employee count later reaches ten or more on a regular basis, the special schedule ceases to apply.

National Tax Office: Consumption Tax Filings

Before considering which consumption tax elections to make, it is important to determine whether the company will be a taxable entity (課税事業者) for consumption tax purposes or an exempt entity (免税事業者). The key threshold is whether the company meets the group-wide revenue test based on the revenue of its related group — a topic covered in Pre-Incorporation Tax Checklist for Foreign Companies Setting Up in Japan. The elections discussed below assume the determination of taxable or exempt status has already been made.

Qualified Invoice Issuer Registration (適格請求書発行事業者の登録申請書)

Deadline: By the end of the first fiscal year (special rule for newly incorporated companies)

Under Japan’s Qualified Invoice System (commonly referred to as the “Invoice System” or インボイス制度), a company that wishes to issue qualified invoices to its customers must register as a qualified invoice issuer with the tax office.

Once registered, the company should be treated as a taxable entity for consumption tax purposes regardless of its capital amount or the number of fiscal years it has been in operation. For foreign-affiliated companies engaged primarily in B-to-B transactions, customers will typically require qualified invoices to claim an input tax credit — making registration a practical necessity in most cases.

Under a special rule for newly incorporated companies, if a registration application is submitted by the end of the first fiscal year with a note indicating that registration should be effective from the first day of incorporation, the company may be treated as a registered issuer from its very first day of operations. For companies that need to issue invoices from day one of business, this special rule should be utilised.

Interaction with the Consumption Tax Taxable Payer Election: Registration as a qualified invoice issuer requires the company to be a taxable entity. Under a transitional measure applicable to fiscal years that include any date on or before September 30, 2029, an otherwise exempt company may register as a qualified invoice issuer without separately filing a Consumption Tax Taxable Payer Election. After that transitional period expires, both filings should be required simultaneously for an exempt company wishing to register.

Consumption Tax Taxable Payer Election (消費税課税事業者選択届出書)

Deadline: By the end of the first fiscal year

An otherwise exempt company may elect to be treated as a taxable entity for consumption tax. This might be advantageous in the following situations:

• Export-oriented revenue: A taxable entity should be able to file a consumption tax return and receive a refund of input consumption tax on purchases made in Japan. An exempt entity should not.
• Significant capital investment in the first year: Input tax on large capital expenditures should be recoverable only by a taxable entity.
• Post-September 2029 qualified invoice issuer registration: After the transitional period described above, an exempt company wishing to register as a qualified invoice issuer will need to file this election concurrently.

Caution: Once this election is filed, the company should generally not be able to revert to exempt status for at least two fiscal years.

Simplified Consumption Tax Election (消費税簡易課税制度選択届出書)

Deadline: By the end of the first fiscal year (covers both the first and second fiscal years)

The simplified consumption tax system allows a company to calculate its input tax credit not based on actual purchase invoices, but by applying a deemed purchase rate (みなし仕入率) — ranging from 40% to 90% depending on the industry sector — to its taxable sales.

Eligibility: The simplified system is available to companies whose taxable sales in the fiscal year two years prior did not exceed JPY 50 million. Since a newly incorporated company has no prior fiscal year revenue, both the first and second fiscal years should be automatically eligible.

A single election filed by the end of the first fiscal year is sufficient to apply the simplified system from the first fiscal year onwards — no separate filing is required for the second fiscal year. It is recommended that the company model the expected revenue and cost structure as the first fiscal year progresses and make a decision before year-end.

Caution: Once the simplified system is elected, the company should not be able to revert to the actual cost method for at least two fiscal years.

National Tax Office: Inventory and Depreciation Elections

Inventory Valuation Method (棚卸資産の評価方法の届出書)

Deadline: By the filing deadline of the first corporate income tax return

This notification designates the method by which the company will value its closing inventory for tax purposes. If no election is made, the statutory default — the most-recent-purchase-cost method (最終仕入原価法) — applies automatically.

Available methods include: specific identification, first-in first-out (FIFO), weighted average, moving average, most-recent-purchase-cost (default), and retail method. The lower-of-cost-or-market method may also be elected in combination with any of the above cost methods.

In practice, companies typically elect the same method as used in their accounting records to avoid book-to-tax adjustments. If the accounting method differs from the statutory default, this notification should be filed to align the two.

Depreciation Method (減価償却資産の償却方法の届出書)

Deadline: By the filing deadline of the first corporate income tax return

This notification designates the method of tax depreciation for tangible fixed assets. The available methods and statutory defaults vary by asset class:

• Buildings, building improvements, and structures: Only the straight-line method is permitted (no election required).
• Machinery, vehicles, tools, and equipment: Either the straight-line method or the declining-balance method may be elected. The statutory default if no election is made is the declining-balance method.

Because the declining-balance method front-loads depreciation (producing higher deductions in early years), there should be limited practical incentive for most companies to elect straight-line instead. In most cases, the default declining-balance method for machinery and equipment is retained without filing this notification.

Local Tax Filings (Prefecture and Municipality)

In addition to national tax filings, a company must separately notify the relevant prefectural and municipal tax offices of its establishment.

Authority	Approximate Deadline
Prefectural Tax Office	Varies by jurisdiction; generally 1–2 months after incorporation
Municipal Tax Office	Same as above

Tokyo-specific rule: For companies registered within the 23 wards of Tokyo, the filing is made to the Tokyo Metropolitan Government Tax Office (都税事務所). A single notification to the Tokyo Metropolitan Government Tax Office covers both the prefectural and municipal portions, so no separate municipal filing is required within the 23 wards. The deadline is within 15 days of incorporation — significantly shorter than the national tax office’s two-month window.

For companies with multiple offices across different prefectures, a separate notification should be filed with each relevant prefectural tax office.

Recommendation: Given the 15-day deadline in Tokyo, this notification should be filed during the first week after incorporation.

Social Insurance and Labor Insurance (Overview)

The following filings are not strictly tax filings, but they arise at the same time as the tax notifications and should be managed in parallel. They are summarised here for reference.

Authority	Filing	Deadline
Pension Office (年金事務所)	Health Insurance and Employees’ Pension Insurance — New Enrollment Notification	Within 5 days of incorporation
Labor Standards Office (労働基準監督署)	Labor Insurance Coverage Commencement Notification	Within 10 days of first hire
Public Employment Security Office / Hello Work (ハローワーク)	Employment Insurance Applicable Establishment Notification	Within 10 days of establishment
	Employment Insurance — Employee Enrollment Notification	By the 10th of the month following the month of enrollment

Note: If the company has directors only and no employees, the labor insurance and employment insurance filings should not be required.

Issues Specific to Foreign-Affiliated Companies

FEFTA Reporting to the Bank of Japan (対内直接投資等に関する報告書)

Deadline: Within 45 days of the corporate registration date

When a foreign parent company establishes a Japan subsidiary with an ownership interest of 10% or more, an ex-post report should be submitted to the Minister of Finance and the competent minister of the relevant industry via the Bank of Japan under the Foreign Exchange and Foreign Trade Act (FEFTA / 外為法). This is a statutory obligation distinct from tax compliance and falls outside the scope of a tax adviser’s engagement.

Certain industries — including those related to national security — may require advance notification rather than an ex-post report. This should be confirmed prior to incorporation.

(For pre-incorporation FEFTA considerations, please refer to Pre-Incorporation Tax Checklist for Foreign Companies Setting Up in Japan)

Tax Treaty Notification Before the First Payment to the Parent Company (租税条約届出書)

Deadline: Before the first payment to the parent company

If the Japan subsidiary makes payments to its foreign parent company — such as royalties, management fees, or interest — the payer should generally be required to withhold at the domestic rate of 20.42% under Japanese domestic law. Where an applicable tax treaty exists, however, a reduced rate under the treaty may be available (for example, 0% on interest or 10% on royalties under certain treaties).

To benefit from the treaty-reduced rate in a straightforward manner, it is important to file a Tax Treaty Notification Form (租税条約に関する届出書) with the competent tax office before making the first payment.

For guidance on how to prepare and submit the notification form, please refer to our article on Tax Treaty Notification Forms (English version coming soon; Japanese version available here).

Transfer Pricing Documentation: Early-Stage Considerations (移転価格文書化方針)

If the Japan subsidiary engages in transactions with the foreign parent company from its first fiscal year — such as purchasing products, paying royalties, or receiving management services — the arm’s length pricing of those transactions should be determined and documented early.

Under Japan’s transfer pricing rules, formal local file documentation should be mandatory for companies meeting either of the following thresholds:

• Total value of foreign-related transactions exceeds JPY 5 billion per year; or
• Total value of intangible asset transactions with foreign-related parties exceeds JPY 300 million per year.

Most newly established foreign subsidiaries will not immediately meet these thresholds. However, even for smaller companies, it is recommended to prepare supporting documentation from the outset: the underlying contracts, evidence of services actually rendered, and a pricing rationale. This documentation might provide protection against transfer pricing challenges by the tax authorities in future audit cycles.

(English article on Transfer Pricing in Japan — coming soon; Japanese version available here)

Full Checklist

The following table consolidates all required filings in approximate deadline order.

Authority	Filing	Deadline	Notes
Pension Office	Health Insurance and Employees’ Pension Insurance — New Enrollment Notification	Within 5 days of incorporation
Prefectural / Municipal Tax Office	Corporate Establishment Notification	Within 15 days (Tokyo) to 2 months (varies by jurisdiction)	Tokyo 23 wards: single filing to Tokyo Metropolitan Tax Office covers both prefectural and municipal portions
Bank of Japan (foreign companies)	FEFTA Inward Direct Investment Report	Within 45 days of registration date	FEFTA obligation
National Tax Office	Notification of Corporate Establishment	Within 2 months of incorporation	Attach articles of incorporation and certified registration copy
National Tax Office	Blue Form Tax Return Application	Earlier of: (a) 3 months after incorporation, or (b) last day of first fiscal year	Missing deadline = ineligible for first-year blue form status
National Tax Office	Tax Treaty Notification Form	Before first payment to parent
National Tax Office	Payroll Office Establishment Notification	Within 1 month of establishing payroll office	Required even if director compensation only
Labor Standards Office	Labor Insurance Coverage Commencement Notification	Within 10 days of first hire	Not required if directors only
Hello Work	Employment Insurance Applicable Establishment Notification	Within 10 days of establishment	After first hire
Hello Work	Employment Insurance — Employee Enrollment Notification	By 10th of following month	Per employee
National Tax Office	Application for Special WHT Payment Schedule	No fixed deadline	Available if fewer than 10 employees on a regular basis
National Tax Office	Qualified Invoice Issuer Registration	By end of first fiscal year	B-to-B companies should apply early
National Tax Office	Consumption Tax Taxable Payer Election	By end of first fiscal year	Consider for export companies or those with heavy capital investment
National Tax Office	Simplified Consumption Tax Election	By end of first fiscal year	Single filing covers both first and second fiscal years
National Tax Office	Inventory Valuation Method Notification	By filing deadline of first CIT return	Required only if electing a method other than the statutory default
National Tax Office	Depreciation Method Notification	By filing deadline of first CIT return	Required only if electing a method other than the statutory default

Conclusion

The post-incorporation filing obligations for a Japan subsidiary are numerous, and each involves a different authority and a different deadline. Two deadlines in particular require immediate attention: the Blue Form Tax Return Application and, for companies in Tokyo, the Tokyo Metropolitan Tax Office notification.

For foreign-affiliated companies, the standard compliance agenda is compounded by the Bank of Japan’s FEFTA reporting requirement and — from the moment intercompany payments begin — the need to file tax treaty notifications before the first payment to the parent company. Transfer pricing documentation, while not always formally mandatory for smaller subsidiaries, should be put in place from the outset.

Post-incorporation compliance does not end with these initial filings. Ongoing obligations follow: periodic corporate income tax returns, monthly or semi-annual withholding tax remittances, consumption tax returns, and — for companies with foreign parent reporting requirements — management accounts and group reporting in English. Getting the initial structure right has a lasting impact on the efficiency of the compliance process.

If you are setting up a Japan subsidiary and would like guidance from a tax adviser specializing in foreign-affiliated companies, please feel free to reach out.