Foreign companies using Odoo for Japanese accounting
Overseas headquarters Odoo If used as a common ERP for the group, continuing to use Odoo Accounting for the Japanese subsidiary has the advantage of unifying accounting data and business processes within the group.
Odoo provides country-specific Fiscal Localization, allowing the use of account items, taxes, accounting positions, and other accounting settings according to the company's country. However, implementing localization does not automatically complete Japanese accounting and tax declarations; settings and reviews tailored to the actual business content and Japanese tax treatment are necessary.
Mochizuki & Associatesfocuses on connecting the financial data managed on Odoo to Japanese accounting and tax compliance, rather than the implementation of Odoo's ERP or system development itself.
Confirmation of Odoo Accounting's compliance with Japanese accounting
When using Odoo in Japan, it is first necessary to confirm whether the basic settings such as Fiscal Localization, account items, tax categories, accounting periods, journals, accounts receivable and payable, bank transactions, fixed assets, and others align with the actual transactions of the Japanese subsidiary.
Especially when using the same account item system as the overseas headquarters, it becomes important to determine how to reconcile the account items for group reporting with the information necessary for accounting and tax processing in Japan.
Since Odoo allows different Fiscal Localizations for each company, it is also possible to apply accounting settings for Japan to the Japanese subsidiary while using Odoo across the entire group. Additionally, since the "Branch" in Odoo inherits the localization of the parent company, it is necessary to consider how to set up the company structure in Odoo for the overseas headquarters and the Japanese base, distinguishing it from the legal forms of branches and subsidiaries.
Response to Japan's Consumption Tax (JCT)
Regarding Japan's consumption tax, it is necessary to organize not only the tax rates of 10% or 8%, but also the treatment of taxable transactions, exempt transactions, non-taxable transactions, export exemptions, input tax credits, invoice systems, and other matters according to the transaction content.
By appropriately setting the Tax and Fiscal Position in Odoo, at the end of the period, we will reconcile the accounting data in Odoo with the tax categories, evidence, and adjustment items required for Japan's consumption tax declaration.
Especially for foreign companies, it is often the case that transactions include overseas transactions, import transactions, dealings with overseas headquarters, and services provided by foreign businesses, making it important to confirm not only the tax categories in the system but also the treatment under Japanese consumption tax law.
Corporate Tax, Withholding Income Tax, and Other Tax Declarations
Japan's corporate tax declaration does not simply report accounting profits as they are. Adjustments may be necessary for items such as depreciation, entertainment expenses, donations, provisions, foreign tax credits, and others under corporate tax law.
Therefore, based on the Trial Balance and General Ledger created in Odoo, we will make the necessary adjustments for Japanese tax purposes and link them to corporate and local tax declarations.
Additionally, if withholding income tax arises from payments such as salaries and professional fees, we will also check the accounting treatment in Odoo against the actual withholding and payment status.
Support for Monthly and Annual Closing
By continuously reviewing the accounting data of the Japanese subsidiary, we can identify tax issues on a monthly or quarterly basis rather than making corrections all at once at the end of the fiscal year.
At Mochizuki & Associates, we provide support to prepare the review of journal entries and balances on Odoo, fixed assets and depreciation, intercompany accounts, consumption tax classifications, withholding tax, and other items according to the client's needs, making them ready for year-end tax filings.
Services suitable for foreign companies using Odoo
This service is aimed at foreign companies that use Odoo at their overseas headquarters and want to avoid switching to a different accounting system only for Japan.
By maintaining the accounting data of the Japanese corporation or Japanese business on Odoo while making necessary adjustments for Japanese accounting and tax purposes, we aim to operate without separating group ERP and Japanese Tax Compliance.
As needed, we will collaborate with the client or the company implementing Odoo to address issues related to system settings and accounting and tax matters separately.
Support by Mochizuki & Associates
Our office supports foreign companies using Odoo with accounting data reviews, compliance with Japanese consumption tax, corporate tax and local tax filings, withholding income tax, and other Japanese tax compliance.
If you are already using Odoo for your Japanese corporation or business, please consult us on how to connect your current Odoo Accounting data to Japanese tax filings.