Hagiyamaです。
外国企業が日本の市場に本格的に参入するにあたっては、日本において何らかの現地組織を置く必要があります。
有名どころで言えばApple JapanやAmazon Japan などがありますが、これらは子会社形態（正確には合同会社）です。
一方で子会社ほど多くはないものの、支店形態として日本に進出している外国企業もあります。
外国企業が現地の組織を設立する際に、「子会社」を設立するか「支店」を設立するかについては、法律や税制の違いもあり少し悩ましい問題と考えられます。
ここでは両者の税制についての主な違いについて、一覧表にまとめました。
（なおこの表は、弊社顧客の海外企業向けに作成した資料から固有名詞等を消して編集しただけなので、本文は英語のみです。また、その内容や税率等は２０２１年４月１日時点の制度に基づいています）
日本子会社と日本支店の税制の主な違い
(Japanese taxation main difference between subsidiary and branch）
（as of April 1st, 2021）
| No. | Subjects | Subsidiary （子会社） | Branch （支店） |
| 1 | Organization
（組織形態） |
Subsidiary has legal personality different from that of the overseas parent company, and it is treated as domestic corporation under Corporation Income Tax Act and the same tax system as a domestic corporation is applied. | Under Corporate Income Tax Act, a branch is treated as a permanent establishment (PE) of a foreign corporation. PE is a part of the foreign corporation and does not have legal personality.
In this case, the head office and branch office of the foreign corporation will be subject to corporate tax on the income that should be attributed to the Japanese branch in consideration of the functions of the Japanese branch among the income earned by the foreign corporation. The method of determining the income is called Authorized OECD Approach (AOA). |
| 2 | Effective tax rate
（法定実効税率） |
Capital JPY100million or less : around 34.6%
Capital over JPY100million : around 30.6% |
Same as subsidiary. |
| 3 | Special rule for small and medium-sized enterprises
（中小企業の特例） |
For corporations with capital of JPY100million or less (excluding wholly owned subsidiaries of large companies with capital of JPY500million or more), corporate tax is levied on annual income of JPY8million or less. The tax rate is reduced to 15% up to JPY 8million taxable income. | Same as subsidiary.
Whether the Japanese branch of a foreign corporation can use this reduced tax rate is determined by the amount of capital of the foreign corporation converted into JPY using exchange rate of the closing date. In addition to this, the Japanese branch of a foreign corporation uses this JPY-converted capital when determining whether or not the special provisions for small and medium-sized enterprises can be used. |
| 4 | External standard taxation
（外形標準課税） |
If over JPY100million capital case, in addition to the above taxes, business tax (local tax) is subject to external standard taxation.
Basically, corporate income is not the tax base, but the amount of money that can objectively judge the business scale from the outside is the tax base, so it is called external standard taxation. External standard taxation type and tax rates are followings; |
Basically same as subsidiary for the tax type and rate, however, adjustment on the tax return for Japan branch is required that calculating the total amount of capital and capital surplus of the head office multiplied by the ratio of the number of employees working at the Japanese branch to the total number of employees of foreign corporations. |
| 5 | Entertainment expenses
（交際費） |
As a general rule entertainment expenses are not deductible, but for corporations with capital of JPY100million or less (excluding 100% subsidiaries of large companies with capital of JPY500million or more), entertainment expenses up to JPY8million can be deductible. | Same as subsidiary. To determine whether the capital exceeds JPY100million, the amount of the capital of the foreign corporation corresponding to the Japanese branch is calculated proportionally, not the capital of the foreign corporation. The apportionment calculation is performed using the book value of total assets on the balance sheet of the foreign head office corporation. |
| 6 | Donations
（寄附金） |
Depending on the scale of the amount of capital etc and the scale of income, donations can be deductible. | Same as the above. |
| 7 | Accumulated earnings tax
（留保金課税） |
If more than 50% of the shareholders of the overseas parent company are controlled by one individual and their relatives (including affiliated companies) and other certain requirements regarding capital stock, reserved amount etc are met, the subsidiary can be levied accumulated earning tax in addition to the usual corporate tax. | Not applicable. |
| 8 | Loss carried forward （繰越欠損金） |
The subsidiary that submits the blue return can carry forward the tax loss incurred in each business year for 10 years. | Same as subsidiary. |
| 9 | Payment of interest to foreign-related parties
（外国関連当事者に支払う利子） |
Even if the Japanese subsidiary pays interest to the overseas parent company or other foreign affiliated companies, in principle it is possible to deduct the interest from the deduction of the Japanese subsidiary.
However, the following restrictions may apply to the deduction of interest on loans paid by Japanese subsidiaries to overseas affiliates. |
Basically same as subsidiary, however, the under capital taxation does not apply to Japanese branches, and instead another AOA-based interest deduction limit applies. |
| 10 | Internal transactions between foreign parent company
（内部取引） |
Not applicable because it is treated as external transactions. | When the internal transactions are conducted within the same legal personality, such as transactions with overseas head offices and other branches, profits and losses arising from internal transactions are recognized in principle in the calculation of taxable income of the Japanese branch under Corporate Income Tax Act. However, profits and losses arising from certain internal transactions, such as internal interest and internal royalties are excluded from the calculation of taxable income at the Japanese branch unless the tax treaty allows for recognition of internal transactions. |
| 11 | Officer’s compensation / bonus
（役員報酬・役員賞与） |
If officer’s compensation amount is the same every month, it is allowed to be deductible. Officer bonus cannot be deducted unless certain requirements are met. | Unless the Japanese branch manager is also registered as an officer of a foreign corporation, it can be treated like a normal employee for tax purposes. However, if the manager of the Japanese branch is involved in the management of a director of a foreign corporation, etc., he / she will be regarded as a tax officer, and the restrictions on remuneration, etc. related to the officer will be applied in the same way as the officer of the Japanese subsidiary. |
| 12 | Withholding tax of remittance to foreign parent company
（外国送金に関する源泉税） |
When a Japanese subsidiary remits taxed profits to the parent company, the profits will be returned to the parent company by paying dividends. Dividends paid by an unlisted domestic corporation to an overseas parent company will be subject to a withholding tax of 20.42% if there is no tax treaty reduction or exemption. | Not applicable since the remittance transaction is treated within same corporation. |
日本子会社と日本支店の税制の違い まとめ
節税（＝税金の適法な軽減）という観点からみると、日本進出には立って、子会社のほうが良い・または支店のほうが良い、とは一概に言えません。
１点だけはっきりと言えることは、外国企業から見ると、日本子会社の場合は当該外国企業とは別の法人となりますが、日本支店の場合は当該外国企業と同一の法人です。
この違いがあることから、子会社と支店のいずれにも、メリットとデメリットがあります。
そのため、日本に組織を設立する際にはそれらメリットとデメリットを勘案したうえで決定する必要があります。
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