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I’m thinking of incorporating a company, but won’t be doing any business through it for a year or so. What are the minimum taxes and other fees that I have to pay to keep such a semi-dormant firm going?

July 9, 2012

In principle, the minimum tax a dormant company will owe is the per capita levy which is taxed according to the scale of the amount of paid in capital (shihonkin) and the number of employees the company is hiring. For example, if the amount of the paid in capital of a company which is established in the Tokyo Special Wards is not more than JPY 10,000,000 and the number of employees it is hiring is not more than 50, the amount of the per capita levy is JPY 70,000 per annum. The same rule is applied to a dormant company, therefore the minimum tax a dormant company will owe is JPY 70,000 in the above example.  Please note that the amount of the per capita levy will vary according to the district a company is established.

In principle, a dormant company will not incur any other cost; however, please note that a dormant company also has the duty to file a tax return every year regardless of its activities or lack thereof. So if you decide to have a tax accountant prepare tax returns, the company will of course incur costs related to the preparation of this tax return.

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