【超必見】コレしないと100%損します！財務のプロが教える個人事業と法人メリット！

Summary

The video script discusses the benefits and drawbacks of maintaining both a personal business and a corporation. It highlights tax advantages such as distributing profits between the two entities to stay under the tax-free threshold and the potential for tax savings on consumption tax through careful management. The script also addresses the increased administrative burden and the need for meticulous record-keeping to avoid tax investigations. It suggests that while there are challenges, such as managing both entities and the costs associated with tax services, the potential benefits can be significant. The speaker also touches on the topic of social insurance costs and provides strategies for reducing them. The summary emphasizes the importance of good management practices and the potential for substantial financial benefits when both personal and corporate entities are properly balanced and maintained.

Takeaways

• 📈 **Tax Benefits**: Having both a personal business and a corporation can lead to tax benefits, such as splitting revenue to stay below the consumption tax threshold.
• 💼 **Corporate Taxation**: When individual income increases, it might be more beneficial to incorporate to manage and reduce the overall tax burden.
• 🤝 **Balanced Management**: It's crucial to manage both personal and corporate entities effectively to avoid tax investigations and ensure compliance with tax regulations.
• 🚫 **Avoiding Tax Evasion**: Clearly separating revenues and expenses between personal and corporate entities can prevent accusations of tax evasion or profit manipulation.
• 💰 **Social Insurance Costs**: Operating as a corporation can lead to higher social insurance costs, which can be mitigated by adjusting executive compensation and structuring payments.
• 🎉 **Entertainment Expenses**: There's a limit to the amount that can be claimed for entertainment expenses in a corporation, which can be circumvented by having a personal business for additional claims.
• 📊 **Financial Management**: Regular financial management, such as monthly settlements, is essential to keep track of revenues and expenses and to maintain a clear distinction between personal and corporate finances.
• 📉 **Risk of Investigation**: An imbalance in expenses, such as disproportionately high entertainment costs in the personal business, can attract the attention of tax authorities and increase the risk of investigation.
• 🤔 **Consideration of Scale**: When having both a personal business and a corporation, it's important to consider the scale and balance between the two to maximize benefits and minimize tax liabilities.
• 👨‍💼 **Professional Advice**: Engaging a tax professional can be beneficial to navigate the complexities of having both a personal business and a corporation, especially for compliance and tax planning.
• 🌟 **Potential for Growth**: Starting with both a personal business and a corporation from the outset can position an entrepreneur for growth, allowing for diversification and expansion opportunities.

Q & A

What is the main advantage of having both a personal business and a corporation?

The main advantage is the ability to distribute income between the two entities, which can lead to tax benefits such as remaining under the threshold for consumption tax liability and potentially reducing overall tax burden.

Why might a business owner consider splitting their income between a personal business and a corporation?

Splitting income can help a business owner to avoid becoming a consumption tax liable entity too soon, which happens when annual sales exceed 10 million yen. It also allows for better control over tax payments and potential social insurance costs.

What is the consumption tax implication for a business when its annual sales exceed a certain amount?

When annual sales exceed 10 million yen, the business becomes a consumption tax liable entity, which means it must start paying consumption tax.

How does the tax system in Japan treat personal businesses and corporations differently in terms of social insurance costs?

Corporations are subject to higher social insurance costs. By strategically setting a lower salary for the corporate entity and supplementing income through the personal business, social insurance costs can be reduced.

What is the potential downside of having both a personal business and a corporation?

The downside includes the administrative burden of managing two separate entities, the need for meticulous accounting to separate expenses and revenues accurately, and the additional cost of tax services to ensure compliance with tax laws.

Why is it important to maintain a balance between the expenses and revenues of a personal business and a corporation?

Maintaining a balance helps to avoid arousing suspicion of tax evasion or profit manipulation during tax audits. It also ensures that both entities are managed within legal and financial regulations.

What is the significance of the 8 million yen limit on entertainment expenses for corporations?

The 8 million yen limit is the maximum amount that corporations can claim as a business expense for entertainment costs. Exceeding this limit without a justifiable reason can lead to increased scrutiny from tax authorities.

How can a personal business help in managing entertainment expenses that exceed the corporate limit?

By having a personal business, an entrepreneur can allocate some of the entertainment expenses to the personal business, where there is no such limit, thus avoiding the appearance of excessive entertainment costs within the corporation.

What are some strategies to minimize social insurance costs for both a personal business and a corporation?

One strategy is to set a lower salary for the corporate entity and supplement the income with earnings from the personal business. This can reduce the social insurance costs associated with the corporate salary while still providing a decent income.

What is the recommended approach to managing the financial records of both a personal business and a corporation?

It is recommended to conduct monthly financial settlements (决算, kesan) for both entities to ensure clear and accurate tracking of revenues and expenses. This practice helps to prevent confusion and potential issues during tax audits.

What is the general advice for someone considering starting both a personal business and a corporation from the outset?

Starting both simultaneously can be beneficial, as it allows for immediate diversification of income and potential tax advantages. However, it's crucial to be prepared for the additional administrative and management responsibilities that come with running two business entities.