A Simple Explanation of Taxes for Doing Business in Japan

Hi, my name is Taisei Koshida, and I am a certified public accountant and tax accountant.

I aim to assist non-Japanese business owners who struggle with reading or writing in Japanese. If you find the Japanese tax return system challenging, I can help you with your tax filings.

If you are unsure about Japan’s taxes, this blog can be helpful for you.

1. For individual businesses

(1) Income Tax:

You need to pay income tax based on the profit for a calendar year. The tax rate ranges from 5% to 45% depending on the profit.

(2) Inhabitant Tax:

You need to pay inhabitant tax based on the profit of income tax. The tax rate is a uniform 10%.

(3) Business Tax:

If your profit exceeds 2,900,000 yen, you need to pay business tax for the surplus amount, with rates ranging from 3% to 5%.

(4) Consumption Tax:

If the sales of your business exceed a certain amount, you need to pay consumption tax.

If you want to learn more about consumption tax, please refer to the following information.
An Easy Explanation of Consumption Tax for Doing Business in Japan

2. For Corporations like A Stock Company:

(1) Income, Inhabitant, And Business Tax:

You need to pay income tax and inhabitant tax based on the profit for the fiscal year. The total tax rate is approximately 30%.

(2) Consumption Tax:

If the sales of your business exceed a certain amount, you need to pay consumption tax.

If you want to learn more about a filling tax, please refer to the following information.

Tax filing assistance for self-employed individuals who are not Japanese.

Our accounting firm has been actively assisting foreign business owners in Japan with accounting and tax matters. Please feel free to contact us through the inquiry form.