Q84:What are the income tax rates for corporations and individuals in Japan?

Response from a Japanese tax accountant: Hello to everyone considering entering Japan. I will explain about corporate and personal income tax in Japan.

Corporate Income Tax

Corporate taxes in Japan consist of corporate tax, local corporate special tax, business tax, and resident tax. The combined effective tax rate is approximately 35%. However, the tax rate varies depending on the income amount and size of the company.

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Personal Income Tax

Personal income tax is composed of income tax, business tax, and resident tax. Japan employs a progressive tax system where higher incomes attract higher tax rates. Income tax rates range from 5% to 45%, and the resident tax rate is uniformly 10%. Additionally, depending on the income amount, there may be no tax liability.

When considering personal taxes, social insurance premiums are also an important factor. These need to be paid separately from taxes but can impact an individual's financial burden.

If you have any questions about taxes or consultations about entering Japan, our Japanese tax accountants can support you in English. Please feel free to consult us at any time.

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Japanese Certified Public Accountant ・Tax Accountant Hiroya Aihara
Ringo Tax Corporation

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