Services

Tax Services for Public Interest Corporations

Taxation of public interest corporations (koueki houjin) is unique in many respects, and tax issues vary significantly depending on the type of corporation. Our qualified professionals at Deloitte Tohmatsu Tax Co. assist these corporations with addressing their various tax issues.

Tax Services for Public Interest Corporations

Taxation of public interest corporations (koueki houjin) is unique in many respects, and tax issues vary significantly depending on the type of corporation.  Not only corporate tax related issues but also consumption tax related matters, such as the calculation of "Specified Revenue", must be carefully examined.  Our qualified professionals at Deloitte Tohmatsu Tax Co. assist these corporations with addressing their various tax issues in an efficient and effective manner using our nationwide network and extensive experience.

Tax consulting support
Our professionals offer advice by email or phone on general day-to-day tax issues regarding corporate tax, consumption tax, withholding income tax and other taxes.  We can also perform a periodical review of accounting records used for consumption tax purposes.

Preparation or review of tax returns
We prepare tax returns relating to corporate tax, inhabitants tax, local enterprise tax and consumption tax.  We can also perform reviews (at the requested level) of client prepared draft tax returns.

In addition, we prepare or assist in the preparation of financial statements of a profit-making business to be attached to public interest corporations' corporate tax returns.

Analysis of the scope of taxable income for corporate tax purposes
We review the appropriateness of taxable income for corporate tax purposes by analyzing the profit-making business, and the expense allocation provided under the Corporation Tax Law and, if necessary, review a clients’ expense allocation in order to propose the most appropriate solution.  We also provide support for the filing of approval to exclude administrative services from a profit-making business, where these services are performed for non-profit purposes based on an actual expense reimbursement basis.

Support for the determination of "Specified Revenue" for consumption tax purposes (tokutei shiny)
We provide advice and support for determining whether or not revenue falls under the definition of "Specified Revenue" (tokutei shiny), and help clients understand how to calculate consumption tax.

Preparation of consumption tax manuals
We assist clients to compile consumption tax manuals that provide guidance on how to determine what transactions are taxable or non-taxable, including how to prepare consumption tax returns.  The manuals allow clients to perform appropriate accounting and return preparation related to consumption tax by themselves, even in the event of changes in personnel.

Support for the implementation of the itemized method (Koketsu Taiju houshiki)
Public interest corporations with taxable sales of over JPY 500 million or a taxable sales ratio of less than 95% which currently claim input tax credit using the proportional method (ikkatsu hirei haibun houshiki) may be able to reduce their consumption tax liability (or increase the amount of refunds) by implementing the itemized method.  Also, it may be possible to increase creditable input tax by filing a request for the use of an alternative sales ratio instead of the taxable sales ratio in the calculation of the input tax credit.  We provide support for a feasibility analysis and the filing of applications.

It is worthwhile to consider this alternative consumption tax reporting method in particular for corporations with taxable sales exceeding JPY 500 million or a taxable sales ratio of less than 95%.

Tax audit support
The key to successful tax audits is preparation and appropriate responses to requests from tax auditors.  Deloitte Tohmatsu Tax Co. supports clients to properly handle tax audits by carefully analyzing tax treatments based on our extensive experience and logical reasoning skills.  We also attend meetings with tax auditors and, if necessary, prepare, or review drafts of, amended tax returns after audits.

Public Interest Corporations

Our potential clients and their unique tax issues for each type of public interest corporation are as follows:

Incorporated schools (gakkou houjin)
 Profit-making business taxation
 Special calculation allowed for the national, local public entities and others applied in calculation of input tax credit
 Tax relief for donations made to incorporated schools

State/local Independent administrative institutions, national/other public university corporations and municipally-owned corporations
Special calculation allowed for the national, local public entities and others applied in calculation of input tax credit
 Classification of "Specified Revenue"
 Identification of use of "Specified Revenue" (including obtaining of documents specifying usage from grantors)
• Determination of taxable revenue upon the integration of independent administrative institutions (i.e., determination of the scope of profit-making business upon a change in entity status from a non-taxable corporation to a taxable corporation)

Public interest incorporated associations (koueki shadan houjin) and public interest incorporated foundations (koueki zaidan houjin)
• Profit-making business taxation (treatment of deemed donations)
 Special calculation allowed for the national, local public entities and others applied in calculation of input tax credit
• Filing applications for treating donations as certain non "Specified Revenue" (in accordance with the 2013 tax reform)

General incorporated associations (ippan shadan houjin) and general incorporated foundations (ippan zaidan houjin)
 Determination of entity status (corporation for non-profit or corporation for profit)
 Profit-making business taxation (for non-profit)
 Special taxation for entities newly qualified as profit corporations
• Special calculation allowed for the national, local public entities and others applied in calculation of input tax credit

Others - social welfare corporations, religious corporations, social medical corporations, trade unions, public officers mutual aid associations and voluntary associations, etc.

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