Corporate Taxes

Running a business in Japan requires you to pay various kinds of taxes to the national and local governments. Depending on the type and size of your business as well as the location of the head office, rates may vary greatly. It is highly recommended that you consult an accountant or a tax professional.

Corporate tax (national)

This tax is calculated annually on the taxable income of the previous fiscal year. If a corporation has been established in Japan, this annual income includes revenue created internationally as well.

Corporate inhabitant tax (local)

This tax is not only related to the annual income of a corporation, but also to its capital and the number of employees.

Business tax (local)

This is the prefectural equivalent to the national corporate tax, calculated annually on the income of the previous year. Unlike inhabitant tax, enterprise tax may be deducted as a tax deductable expense.

For more details, please refer to the JETRO website

Filing for tax returns

In the case of corporations, you have to file a report including the complete revenue generated in that fiscal year and present it to the tax office, so that it can be confirmed.

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