(Updated:2020/5/11)

Overview of Japan subsidy program for sustaining businesses (持続化給付金): English version

  • What is Japan subsidy program for sustaining businesses?

Many Japanese businesses expect declines in revenues because of the coronavirus outbreak (COVID-19), and the Japanese government is going to provide subsidies to struggling companies (up to JPY 2,000,000) and sole proprietors/individual businesses (up to JPY 1,000,000).

 

  • Who is eligible for the subsidy?

Businesses have to meet the following requirements.

  1. Businesses’ sales decreased by 50% or more compared with the same month of the previous year, because of the impact of coronavirus.
  2. Businesses had sales before 2019 and are willing to continue their business.
  3. For companies, their capital is less than JPY 1 billion. Or, the number of regular employees is 2,000 or less.

Note:

Sales might decline because of other reasons. Then it may not be appropriate to get this subsidy. Therefore, when needed, you will have to prove a clear correlation among the coronavirus outbreak, the decrease in sales in 2020, and the sales in the previous year. There is no need to submit any documents that show sales decreased because of the coronavirus outbreak. But we recommend you prepare something.

There may be an on-site inspection, interview, etc. if necessary.

If businesses received the subsidy illegally, they must return it. And 20% of the subsidy and 3% interest per annum is added. Also, your name will be revealed to the public.

Some businesses such as public corporations are not eligible for the subsidy.

 

  • By when do businesses have to apply for?

Businesses have to apply for it by 15th January 2021 (starting from 1st May 2020).

 

  • How can businesses apply for?

Online (https://www.jizokuka-kyufu.jp)

 

  • How long will it take to get it?

Around two weeks after the application.

 

  • How much can businesses get?

Here is the formula:

(Total sales revenue in the previous year)-(Sales in the month when a business faced a decrease in sales by 50% or more on a year-on-year, monthly basis)×12

Note:

Businesses are able to choose the month when they faced the decrease (it should be a month between January 2020 and December 2020).

For businesses ending fiscal year on March, if they chose February 2020, the previous year is from April 2018 to March 2019.

For businesses ending fiscal year on December, if they chose February 2020, the previous year is from January 2019 to December 2019.

 

Here is an example (If companies end fiscal year on March).

Total sales revenue in the previous year (from April 2019 to March 2020): JPY 5 million.

Sales in the month when a business faced a decrease in sales by 50% or more on a year-on-year, monthly basis (April 2020): JPY 200,000

Businesses are eligible for the subsidy because 2020 Apr sales decreased by 50% or more compared with 2019 Apr sales.

Formula: JPY 5 million – (JPY 200,000 × 12) = JPY 2.6 million

Subsidy: JPY 2 million (JPY 2.6 million > JPY 2 million)

 

Here is another example (If companies end fiscal year on December. Or, sole proprietors/individual businesses who filed blue return in 2019).

Total sales revenue in the previous year (from January 2019 to December 2019): JPY 3 million.

Sales in the month when a business faced a decrease in sales by 50% or more on a year-on-year, monthly basis (April 2020): JPY 130,000

Businesses are eligible for the subsidy because 2020 Apr sales decreased by 50% or more compared with 2019 Apr sales.

Formula: JPY 3 million – (JPY 130,000 × 12) = JPY 1.44 million

Subsidy for companies: JPY 1.44 million

(Initially, there was ’rounding down to the nearest hundred thousand yen rule’, and in this case, you only get JPY 1.4 million, but now it is deleted.)

Subsidy for sole proprietors/individual businesses who filed blue return in 2019: JPY 1 million (up to JPY 1 million)

 

 

And one more example (sole proprietors/individual businesses who filed white return in 2019)

Total sales revenue in the previous year (from January 2019 to December 2019): JPY 3 million.

Monthly average sales in 2019 (for those who filed white return, they use this instead of choosing a specific month in 2019): JPY 250,000 (JPY 3 million ÷ 12)

Sales in the month when a business faced a decrease in sales by 50% or more on a year-on-year, monthly basis (April 2020): JPY 100,000

Businesses are eligible for the subsidy because 2020 Apr sales decreased by 50% or more compared with 2019 Apr sales.

Formula: JPY 3 million – (JPY 100,000 × 12) = JPY 1.8 million

Subsidy for sole proprietors/individual businesses: JPY 1 million (up to JPY 1 million)

 

  • What documents do businesses need?

Companies:

  1. Copy of tax return documents in the previous year: front page of tax return (beppyou 1) and ‘corporation business summary description (Houjinjigyougaikyousetsumeisho)’

Note: Beppyou 1 needs tax office’s stamp (For online tax filing, confirmation email is fine).

  1. Sales ledger for the month when a business faced a decrease in sales by 50% or more on a year-on-year, monthly basis (This can be created if you use accounting software. Or you can download this. Note: data should be pdf, jpg, or png)
  2. Copy of bankbook (for companies, bankbook under the name of representative director is fine): it should show bank name, branch number, branch name, bank account type, account number, and account holder name (for online bank, screenshot is fine).

 

Sole proprietors/individual businesses:

  1. Copy of tax return documents in 2019: front page of tax return (daiippyou)
  2. For those who filed blue return: financial statements for blue return in addition to above document.

Note: Daiippyou needs tax office’s stamp (For online tax filing, confirmation email is fine).

  1. Sales ledger for the month when a business faced a decrease in sales by 50% or more on a year-on-year, monthly basis (This can be created if you use accounting software. Or you can download this. Note: data should be pdf, jpg, or png)
  2. Copy of bankbook (see above)
  3. ID: Driver’s license, My number card, basic resident register card, resident card, special permanent resident certificate, or foreign resident registration card

Note: if you don’t have above ID, you can use a) a copy of certificate of resident and passport or b) a copy of certificate of resident and health insurance card.

 

  • Special treatments for those who may not be able to get the subsidy.

There are some special treatments for those who cannot apply for this subsidy program because of the reasons such as: I don’t have the required documents for the application, I have not yet completed the tax return in the previous year, monthly sales can greatly change because of the seasonal fluctuations, I have just set up a company in 2019, the company merged with other company, the company adopts consolidated tax payment system, etc.

Therefore, it is recommended you ask someone to confirm whether you can apply for it.

 

  • External link

Website for the application (no English version).

https://www.jizokuka-kyufu.jp

Japanese government (Japanese)

https://www.meti.go.jp/covid-19/index.html#90

Japanese government (English)

https://www.meti.go.jp/english/covid-19/index.html

(Only limited Information is available compared with Japanese website)

 

  • Caution

The information contained here is for general information purposes only, so you should use it at your own risk. Day One Tax takes no responsibility for any loss or damage caused as a result of the information on this website.