Corporate Tax in Japan

Overview by
Tax Base For Resident and Foreign Companies
Resident companies are taxed on their worldwide income; non-resident companies are taxed only on Japanese-source income. A company that has its principal or main office in Japan is considered to be resident. For additional information.

Tax Rate

Corporation tax 30% of the profit for companies of more than 100 million JPY
Corporation tax for companies under the JPY 100 millions limit 22%
Local taxes Corporation inhabitants tax and corporation enterprise tax vary according to the locality
Effective taxation 41% all inclusive (46% in the Tokyo metropolitan region)
Tax Rate For Foreign Companies
Taxed at the corporate tax rate
Capital Gains Taxation
Taxed at the corporate tax rate.
Capital gains tax on land transfers is subject to a specific method of calculation.
Main Allowable Deductions and Tax Credit
Bad debt, repairs, natural disasters, charitable donation, R&D expenses, etc.
Other Corporate Taxes
Stamp tax, registration and license tax.

Country Comparison For Corporate Taxation

  Japan OECD United States Germany
Number of Payments of Taxes per Year 14.0 14.2 11.0 16.0
Time Taken For Administrative Formalities (Hours) 355.0 199.3 187.0 215.0
Total Share of Taxes (% of Profit) 48.6 43.0 46.8 48.2

Source: Doing Business

Note: *The Greater the Index, the More Transparent the Conditions of Transactions. **The Greater the Index, the More the Manager is Personally Responsible. *** The Greater the Index, the Easier it Will Be For Shareholders to Take Legal Action. **** The Greater the Index, the Higher the Level of Investor Protection.

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