JTPP

Early announcement of tenders is one of the voluntary measures taken by the Japanese government to facilitate access for foreign companies in the Japanese public procurement market.  As early as possible at the beginning of the fiscal year, in the April-May period procurement of large-scale goods and services are publics in the “Kanpo” Government Gazette.  Early announcement of tenders is largely limited to national government entities and affiliated organizations. 

Kankouju or ‘Public Agency Orders’ relates to the budget of public procurement spending reserved specifically for SMEs.  This earmarked budget is regulated by the Act on Ensuring Receipt of Orders from the Government and Other Public Agencies by Small and Medium-sized Enterprises established in 1966.  

In fact, more than half of the tenders are reserved for SMEs. The Japanese government sets a target for each year, in FY 2013. 56% of the total expected demand of €61.7 billion was reserved for SMEs.

Main points

• Tax treaties will modify the scope of exposure to Japanese taxes for a foreign company
• Many tax exemptions may apply to a foreign company
• In order to benefit from tax exemptions, the company has to notify the relevant Japanese tax office

Most of the European Union member states have signed a bilateral tax convention with Japan in order to avoid double taxation,  to prevent tax evasion

Under Japanese Tax Law, Japanese companies are taxed on their worldwide income, while foreign companies are taxed only on the income earned from their activities in Japan. A Japanese company is defined as a company whose head office or main office is located in Japan (usually when the company is firstly created and registered in Japan), the nationality of its shareholders or place of central management is not relevant. Companies other than this are regarded as foreign companies.

Accounting and tax support is provided by certified public accountants and tax accountants. The role of certified public accountants is to perform audits under the Certified Public Accountant Law, while tax accountants engage in typical tax agent services such as the preparation of tax documentation and giving tax consultations under the Certified Tax Accountant Law. Additionally, both professions provide additional services such as business consulting.