Corporate tax interim return: two methods, scheduled filing or provisional settlement; not required if JPY 100,000 or lessA company sometimes has to pay its tax in advance, in the middle of the year
An ordinary corporation whose business year exceeds 6 months must, in principle, file an interim return within 2 months after the day on which 6 months have passed since the start of the business year. It can choose between a scheduled filing based on the prior year's results and an interim return based on a provisional settlement. If the amount based on the prior year's results is JPY 100,000 or less, no filing is required.
- Corporate tax of the previous business year
- JPY 2,400,000
- Months in the previous business year
- 12 months
- Months in the interim period
- 6 months
- Interim tax amount (JPY 2,400,000 / 12 x 6)
- JPY 1,200,000
Key points
- It applies to ordinary corporations whose business year exceeds 6 months. The deadline is within 2 months after the day on which 6 months have passed since the start of the business year.
- The formula for the scheduled filing is: corporate tax of the previous business year / number of months in the previous business year x number of months in the interim period.
- For an interim return based on a provisional settlement, the first 6 months from the start of the year are treated as one business year and a provisional settlement is made.
- No filing is required if the scheduled filing amount is JPY 100,000 or less, or if there is none. An interim return based on a provisional settlement cannot be filed in cases such as when the tax from the provisional settlement exceeds the formula amount.
- If a corporation that should file does not do so by the deadline, it is deemed to have made the scheduled filing. The tax to be paid must be paid by the filing deadline.
What to do in practice
- Estimate the scheduled filing amount from last year's corporate tax, and if it exceeds JPY 100,000, secure the funds for payment.
- If this year's profit is expected to drop sharply from last year's, consider filing an interim return based on a provisional settlement.
A company's tax is normally decided all at once after the year ends. But a company with a long business year has to pay part of its tax in advance once half the year has passed. This is called an "interim return". You can choose to calculate it from last year's results or from the results of this year's first half.
- 1. Half a year passes6 months have passed since the start of the year
- 2. Choose a methodCalculate from last year's results or a half-year settlement
- 3. File within 2 monthsIf it is JPY 100,000 or less, you do not need to file
- 4. PayPay the determined amount by the filing deadline
Points
- Within 2 months after exactly half the year has passed, you pay part of the tax in advance.
- You can choose to calculate it from last year's results or from this year's first-half results.
- If the advance payment is JPY 100,000 or less, you do not need to file.
What the words mean
- Interim return
- Filing and paying part of the tax in advance, partway through the year
- Provisional settlement
- Doing a trial calculation for just the first half of the year
- National Tax Agency: National Tax Agency: Overview of corporate tax and filing guide (October 2024, Reiwa 6)
This article summarizes and explains materials published by government agencies and is not advice on any individual case. Rules can change, so for actual procedures and decisions always check the latest original materials and consult professionals such as tax accountants or labor and social security attorneys. English, Simplified Chinese and Traditional Chinese versions are translations prepared from the Japanese articles for convenience. If anything differs, the Japanese text and the original source take precedence.