Essential Tax Information When Starting a Business in Japan: Property Taxes

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

This blog may help if you are unclear about property tax.

Property tax

This tax is levied on lands and buildings in Japan as of January 1st of the current year, applicable not only to businesses but also to all property owners. Since lands and buildings are registered, municipalities calculate the tax based on the registered value, applying a tax rate of 1.4%.

Depreciation assets tax

Eligible assets and taxpayers

This tax applies to depreciable assets, excluding lands and buildings, owned by businesses as of January 1st of the current year. Cars are excluded since they are separately taxed under automobile tax.

Tax calculation method

The tax amount is determined by multiplying the book value after depreciation by a 1.4% rate. However, businesses with a total book value of less than 2,900,000 yen are not taxed.

Taxation procedure

All businesses are required to submit details of their owned assets to the relevant municipalities by the end of March every year. The municipalities determine the tax amount based on this report.

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