Blue Tax Return System: Who Qualifies and What You Get
Learn how freelance tutors can reduce their taxable income through the Blue Tax Return System in Japan.
The Blue Tax Return System is a tax filing method in Japan that allows self-employed individuals to reduce the amount of income they are taxed on.
Who it's for
This scheme is specifically intended for freelance tutors who earn business income. It is designed for those working for themselves rather than as employees, helping them manage their professional finances through a specialized reporting method.
What you get
By using this system, you can receive a significant deduction from your taxable income. You can claim a deduction of up to ¥650,000. This deduction lowers the total amount of income that the government uses to calculate how much tax you owe, which can result in a lower overall tax bill for your tutoring business.
What it costs you
Using this system requires more administrative effort than standard filing. You must maintain double-entry bookkeeping, which is a detailed accounting method where every transaction is recorded in two different accounts to ensure accuracy. Additionally, you must complete a prior application process with the authorities to be recognized under this system before you can claim the benefits.
The catch to know
There is a strict deadline for your application. You must apply by March 15th of the year you start the business. If you miss this specific date, you may not be eligible to use the system for that period.
How to apply
- Determine if your tutoring work qualifies as business income.
- Submit a prior application to the relevant tax office.
- Implement a double-entry bookkeeping system to track all business transactions.
- Complete your annual tax filing according to the requirements.
- Check the official portal for more details: https://www.nta.go.jp/