I am wondering if it makes sense in my situation to change from being a sole proprietor to a Godo Kaisha.
My situation is as follows:
Annual profit: ~16,500,000Yen
Family: wife (not working), child on the way
The idea is to split the income through the company into two salaries, my wife would take of the financial and administrative work while I do the usual business. This should in theory lower the tax burden overall because we have two lower taxed salaries instead of one high tax salary. Social insurance and pension payments would increase compared to now, but offer better benefits and a stronger retirement payment.
Now I am investing into a non-japanese brokerage with 25% fees on profits. (Not a permanent resident yet and no 5+ years in Japan, therefore I am taxed on my investment profits in my home country, where my brokerage is). But I would move that investment into a NISA and invest future profit through the company instead.
We are also planning on buying a house, which I could also do through the company and then rent to myself to use the costs as deductibles correct? I still have to pay a rent, which would be part of the company income, but the paid rent can be around 20% of the market rate as far as I know? And the costs of the house payment would be a net negative, further decreasing tax?
Is this all correct and legal so far or am I making mistakes?
Considering involvement of a tax accountant to support the whole process, does it financially make sense to move on with this or is the overall benefit with this annual income not worth the savings?
by The-unreliable-one