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Blue Return (tax benefit)

If a company keep double-entry records properly in its accounting book, the tax return of the company is treated as Blue Return and some tax benefits will be offered.

What’s Blue Return?

There are two types of tax return: the White Return (shiroiro shinkoku, 白色申告) and the Blue Return (aoiro shinkoku, 青色申告). If a company keep double-entry records properly in its accounting book, the tax return of the company is treated as Blue Return and some tax benefits will be offered.

What’s Double-entry Bookkeeping? 

Double entry bookkeeping is the most common way of accounting in which every transaction has a corresponding positive and negative entry (debits and credits). For instance, when you earn cash $100 as sales, you need to make two entries: a debit entry to Cash account and a credit entry to Revenue account.

Double-entry Bookkeeping generates Balance Sheet and Profit and Loss Statement.

How Do I Get Blue Return Tax Benefits?

If you want to take tax advantages of the Blue Return, you are required to submit the application form before the business year starts. If it’s the first business year since the company was incorporated, the due date of the application is the day preceding either (a) the day after 3 months from the date of incorporation or (b) the last day of the first business year, whichever is the earlier. In the application form, you will declare how you keep accounting such as types of books (general ledger and slips) and timing of entries (monthly, quarterly or yearly).

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