Blue Return
In exchange for proper bookkeeping, you receive up to 650,000 yen deduction, loss carryforward, and other tax benefits.
Recommended: Full-time freelancers
White Return
No prior registration needed, simple records are acceptable. No special deductions, but minimal administrative burden.
Recommended: Side income, small amounts
Blue vs White Return Comparison
| Category | Blue Return | White Return |
|---|---|---|
| Special Deduction | Up to 650,000 yen | None |
| Bookkeeping Requirements | Double-entry (650K) / Simple (100K) | Simple records acceptable |
| Prior Registration | Registration within 2 months of starting | Not required |
| Loss Carryforward | Can carry forward for 3 years | Not allowed |
| Family Employee Salaries | Deductible as employee expense | Limited deduction only |
| Depreciation Benefits | Special treatment for items under 300K yen | Immediate depreciation only under 100K yen |
| Bad Debt Allowance | Can be recorded | Not allowed |
Tax Savings Example
Revenue 5M yen, Expenses 2M yen (calculated at 20% income tax rate)
With Blue Return
Tax 470,000 yen
(5M - 2M - 650K) × 20%
With White Return
Tax 600,000 yen
(5M - 2M) × 20%
Savings with Blue Return
130,000 yen
Which Should You Choose?
Blue Return is Recommended If...
Significant Revenue
With annual revenue of several million yen or more, the 650,000 yen deduction becomes very valuable.
Can Manage Books
Accounting software makes double-entry bookkeeping manageable. Denpyo automates receipt entry.
Plan to Continue Business
If continuing long-term, benefits like loss carryforward become valuable.
White Return May Be Fine If...
Small Side Income
With minimal annual revenue, the simpler white return may be more practical.
Just Started This Year
If you missed the blue return registration deadline, you can switch to blue next year.
How to Register for Blue Return
Submission Deadline
- New business: Within 2 months of starting
- Switching from white: By March 15 of that year
Required Documents
Submit the "Blue Tax Return Approval Application Form" to your local tax office. Available for download from the NTA website.
NTA: Blue Return System