Out line of Japanese Tax system for business structure


Today I would like introduce about Japanese taxation system.

We have many kind of tax in Japan. If you would like to set up company you have to file tax return every busines year. So you should know the outline of Japanese tax system. I would lile to show you it now.

Type of Tax

Income Tax

【National Tax】
1. Corporate income tax Taxable income ×23.2%(When your income over \8M)

2. Local corporate tax Corporate tax ×4.4%
【Local tax】
1.Corporate resident tax(Per Capita less than \10M)
To Kanagawa Pre:Corporate tax ×3.2%+\20,000(per capita tax)
To Kawasaki City:Corporate tax ×9.7%+¥50,000(per capita tax)

2. Corporate Enterprise Tax(income over \8M) Taxable income×6.7%

3. Special Local Corporate tax  Corporate Enterprise Tax×43.2%

【Effective tax rate of national and local】(2018/4/1~2019/3/31)
23.2%(corporate income tax)+23.2%x4.4%(Local corporate tax)
+23.2%x(3.2%+9.7%)(Corporate resident tax) +6.7%(Corporate Enterprise Tax)+6.7%x43.2%(Special Local Corporate tax)=36.81%

Non-Income Tax

1. Consumption tax
Taxable sales×8% ー taxable purchase×8%

1. Fixed asset tax (tax on the land and building)
Tax base×1.4%
We have the register system for the land and buildings in Japan

2. Depreciable assets tax(Machinery, equipment, devices)
Tax base×1.4%

You have to submit the information of the base amount to
the local tax office until end of January.

Taxation method

【taxes imposed through self-assessment】
File of tax returns through the tax office and local office by the announced due date and self-assessment. ・・・corporate tax ,local corporate tax, Corporate resident tax , corporate enterprise tax, consumption tax

【taxes imposed through official assessment】
Make payment according to and by the due date indicated on the tax notice sent from the relevant tax office.・・・Fixed assets tax, depreciable assets tax.


Due date of filling returns

【Income tax】
Tax returns are filled within 2months of the end of business term.

【Consumption Tax】
Tax returns within 2 months of the end of business term.