New Subsidy, Benefits for business operators who were affected by covid-19
Table of Contents
Your company’s business was affected by coronavirus. Recent sales amount decreased by 50% or more compared to before pandemic.
So you will prepare documents that clarifies recent sales amount and past sales amount. Then, you will undergo pre-confirmation with your tax accountant. And you will apply for this subsidy. Your company will receive a subsidy of 1 million yen.
As for details, you can read through this page or hire a person.
Let’s say you are running a business in Japan.
However it has been greatly affected by the new coronavirus infection. In that case, you may be able to receive this subsidy.
If you meet the following conditions 1 and 2, you may be able to receive this benefits(=subsidy) regardless of type of your industry or location.
1 Your business was affected by the new coronavirus infection.
2 Sales in any month between November 2021 and March 2022 were decreased by 50% or more compared to sales in the same month between November 2018 and March 2021. (Case 1).
Sales in any month between November 2021 and March 2022 were decreased by 30% or more (less than 50%) compared to sales in the same month between November 2018 and March 2021. (Case 2)
If sales in December 2018 were 100,000 yen and sales in December 2021 were 50,000 yen. (Case 1)
If sales in December 2020 were 100,000 yen and sales in December 2021 are 70,000 yen. (Case 2)
How much will you receive?
Amount of benefit = Net sales in the base period – Net sales in the target month x 5
The base period is the period “November 2018 – March 2019” or “November 2019 – March 2020” or “November 2020 – March 2021”.
It is a period that includes the month used for the comparison of sales.
The target month is any of the months from November 2021 to March 2022.
It is a month in which sales decreased by more than 50% or more than 30% but less than 50% compared to the same month of the base period.
For example, sales in January 2022 were 50,000 yen. On the other hand, sales in January 2021 were 100,000 yen. So you can say that your sales for the target month decreased by more than 50%.
In this case, the base period is from November 2020 to March 2021.
Supposed your total sales for the base period (November 2020 to March 2021) was 500,000 yen.
Then, 500,000 yen – 50,000 yen x 5 months = 250,000 yen.
So we can say that you are entitled to receive a benefit of 250,000 yen.
However there is a limitation on amount of subsidy receivable.
So, it is not easy to receive a subsidy of 2.5 million yen.
(Only large company will be able to receive subsidy of 2.5 million yen)
From January 27, 2022, you can apply for Prior confirmation (a kind of meeting). And you can apply for this subsidy from 31, January 2022 to end of May 2022.
If you have been significantly affected by the spread of the new coronavirus infection. In addition, if the sales of the target month (e.g. January 2022) decreased by more than 50% ／ OR more than 30% but less than 50% compared to the base month (e.g. January 2021) without your own business judgment, you may be able to apply for this subsidy.
If the national or local government requests your company to close or shorten business hours, or to postpone or cancel an event and You lost the opportunity to increase sales as a result.
Your customer or business partner has closed or shortened business hours due to the expansion of Coronavirus and You lost the opportunity to make sales because of it.
The customers of your business have started to refrain from going out. And you have lost the opportunity to make sales.
Foreign cities blockaded because of coronavirus, etc. And you have lost the opportunity to make sales.
If you have been indirectly affected by any of the above because your customers or business partners have been affected by any of the above circumstances.
The supply of things you need for your business has been reduced because of the Corona disaster.
The national and local governments have been requested to take measures against coronavirus. And you lost the opportunity to have the business meeting you needed because of it.
National and local governments have requested corona measures related to employment (e.g., requesting that employees do not come to the workplace). And you were unable to secure the necessary employees for your business.
If you intentionally change the sales accounting standard or the timing of transactions with customers and it decreased sales amount in target month (ex. 2022, January) Or
If you voluntarily close your business or shorten your business hours without being requested to do so.
If you have changed the products or services you sell.
You may be requested to submit additional documents to support the fact that it has been affected by the new coronavirus infection.
Examples of documents:
letters of request from local governments, letters of announcement showing that business partners have closed due to the coronavirus, documents showing the relevance to your business, etc.
In order to apply for this benefit, you need to swear and agree with following items. And the representative director of the company or sole proprietor must sign the oath and agreement paper.
If you make a false oath or violate the agreed matters, you must immediately return the subsidy.
Matters to be affirmed
1 That you meet the requirements for benefits.
2 That your application is not false.
3 That you are not a member of a crime syndicate.
4 That you will continue to operate your business.
5 That you will keep accounting books and other documents for seven years using electromagnetic records, etc., and submit them promptly upon request.
If you have already received temporary or monthly support money (いちじしえんきん、げつじしえんきん), you can omit some of the application steps below.
Even if you have NOT received temporary or monthly support money, but you have a familiar tax accountant etc. that is registered person to conduct pre-confirmation, you can omit some of the application steps below.
In the case you have already received temporary or monthly support money (一時支援金、月次支援金)
In this case, you can skip application for opening of account and the pre-confirmation (like an interview) by a registered person to conduct pre-confirmation.
You can use the information you submitted when you applied for temporary or monthly support.
All you have to do is apply immediately and the Organization (that will examine applications for this subsidy) will start reviewing your application. And if your application is approved, you’ll receive your benefits.
In the case you have NOT received temporary or monthly support money (一時支援金、月次支援金)
If you have a registered person to conduct pre-confirmation （your familiar tax accountant etc.）with whom you have an ongoing relationship, you can make an appointment with a registered person to conduct pre-confirmation (interview).
He will confirm with you if you have understood details of this subsidy and your business situation that is affected by covid-19.
You can receive a simplified pre-confirmation via video conference or in person/telephone.
If the registered confirmer knows that you are affected by the covid-19, the pre-confirmation can be skipped.
After receiving the pre-confirmation, you can prepare necessary documents and apply for benefits.
In order to prevent fraudulent receipt of benefits and to prevent benefit claims based on misunderstandings, you need to undergo prior confirmation.
You are confirmed that you (1) are operating a business, (2) are affected by the new coronavirus infection. (3) correctly understand who is entitled to receive benefits.
Specifically, the “registered person to conduct pre-confirmation” will ask you to show the necessary documents (accounting books, etc.) via videoconference or in person.
1. You apply to open an account. This account is required to apply for pre-confirmation and benefits online. Then you will get an application ID number.
At the same time, you will prepare the necessary documents for pre-confirmation (Many documents !).
2. Make a request and appointment with a registered person to conduct pre-confirmation by phone or e-mail to receive a pre-confirmation.
3. Receive pre-confirmation
You can receive prior confirmation by videoconference/face-to-face/telephone (Only if you have an ongoing relationship with a registered person to conduct pre-confirmation).
The registered person to conduct pre-confirmation will check if you have the necessary documents (tax return papers, accounting books, etc.). This person will not make a determination as to whether or not you are actually eligible for benefits.
4. After receiving prior confirmation, you can visit a website to fill out the required information, etc. And you can make application for benefits.
(1) Application for account opening and Preparation of documents required for pre-qualification
Account opening 🍓
You can apply for opening of an account on the website of the organization that handles the administrative procedures for this benefit. An “application ID number” will be issued automatically. (This organization is referred to as “organization”)
Prepare the necessary documents to receive a pre-confirmation.🍌
In order to receive prior confirmation, the following documents are required. However, you may omit items (1) through (4) if you have a continuous relationship with registered person to conduct pre-confirmation (e.g. If the person is your familiar tax accountant, she knows that your business was affected by covid-19).
In that case, please prepare only (5).
(1) Identity verification documents (Resident card) and a certified copy of the company’s registration
(2) A copy of the tax filing papers for the following periods, with the tax office’s seal of receipt
In the case of company : November 2019, November 2020, all fiscal years including the base period
Sole proprietorship, etc. : 2019, 2020, all years including the base period
(3) Accounting book and relevant documents (sales ledger, invoices, receipts, etc.) for November 2018 to the target month (January 2022)
(4) Passbook recording all business transactions since November 2018.
(5) “Written oath and agreement paper” handwritten by the representative director of the company or the sole-proprietor.
As for (3), if the amount of documents is huge, the registered person to conduct pre-confirmation can arbitrarily select multiple months. In that case, you only need to prepare the accounting documents for the selected months.
Find a person who is convenient for you from the “List of registered confirmers” on the organization’s website.
If you have an ongoing relationship with the registered confirmer, you can skip checking if you have the documents (tax filing papers, accounting books etc. Because the registered confirmer may already have them. The registered confirmer can also conduct pre-confirmation by phone (without seeing your face.)
The registered confirming person will conduct a preliminary confirmation of the following information.
(1) Confirmation of the following: “Type of business,” “Application ID number (When you applied for opening of account on the organization’s website, you acquired it),” “Telephone number,” “Corporate number and name,” and “Name and date of birth.
(2) Confirmation of the existence of a “continuing relationship”
(3) Method of prior confirmation
(4) Confirmation of the applicant’s identity
(5) Confirm whether or not you have a copy of your tax return, books and records, and bank book.
(6) Confirmation of the contents of the “accounting books” and “bank book” for the month chosen by confirmer.
(7) Ask about the decrease in sales due to Coronavirus
(8) Confirmation as to whether you have correctly understood the contents of the written oath and consent document
(9) Finally, the confirmer will issue a pre-confirmation notice number
(However this pre-confirmation notice number is not necessary to make application for this subsidy)
After prior confirmation by the registered confirmer, you can apply for this subsidy from the web page set up by the organization.
In principle, those who have already received temporary or monthly support money do not need to undergo another prior confirmation for this application.
1) Log in to the web page set up by the organization that will review whether to grant this benefit.
2) Enter your basic information and attach the following required documents (online)
3) Click the “Apply” button.
Assume that you have not yet received your one-time and monthly support payments, and that you do not have an ongoing relationship with the person (registered with the organization) who will conduct pre-confirmation.
1) Copy of Tax filing paper
2) Accounting books (refer to the example below) for sales in the subject month (e.g. January 2021)
3) Certified copy of company registration (In the case of corporation)
4) Identity verification document (In the case of individual, e.g. residence card)
5) Bankbook (the page where the payee can be confirmed)
6) Affidavit and consent document (stating that you are not lying about the contents of this application)
7) Accounting books pertaining to sales in the base month (e.g. January 2019)
8) Invoices, receipts, etc. for one transaction pertaining to sales in the base month (e.g. if you sold pencils in January 2019, you can submit an invoice and receipt for the transaction)
9) Passbook, etc. pertaining to the sales of the base month (pages that show the transactions in January 2019)
Assumed that fiscal year end of your company is end of December.
Your (your company’s) sales in January 2022 were more than 50% lower than your sales in January 2019. So, you are going to apply for this benefit.
(By the way, The coronavirus started spreading around December 2019)
The base period in this case would be November 2018 to March 2019.
The copy of tax papers needed in this case must be for fiscal years 2018 (filed with the tax office around February 2019), 2019, and 2020.
Your company’s fiscal year end is end of December.
Your company’s annual sales are less than 100 million yen.
Assume that the target month (the month in which you claim that sales were reduced by the coronavirus) is January 2022 and the base period is November 2018 to March 2019.
Sales in January 2022 are 50,000 yen.
Sales in January 2019 were 300,000 yen.
So, compared to the base month, the sales in the target month (January 2022) have decreased by more than 50%.
This decrease is due to the coronavirus.
So your company can apply for this benefit.
Then, calculate how much benefit your company will receive !! 🍎
Assume that the sales for the base period (November 2018 to March 2019, 5 months) was 1.5 million yen.
In this case, the calculation formula would be.
1.5 million yen – 50,000 yen x 5 = 1.25 million yen
The maximum amount that your company can receive is 1,000,000 yen （Refer to table above）.
So your company will receive a benefit of 1,000,000 yen instead of 1,250,000 yen.
If you need any support to apply for this subsidy, you can contact with me. akiyama(a)japan-law-tax.com