Frequently Asked Questions
【Koshida Accounting Firm Column Date:】
What are the tax obligations for foreign companies in Japan?
The main Japanese taxes that may apply to foreign companies doing business in Japan include corporate taxes and consumption tax.
Japan’s effective corporate tax rate is often around 30%, although the actual rate depends on factors such as taxable income, company size, capital, and location. Japan’s standard consumption tax rate is 10%, subject to applicable rules and exceptions.
Foreign companies may also need to consider international tax issues such as Permanent Establishment (PE), withholding tax, and tax treaty provisions depending on how they operate in Japan.
An Easy Explanation of Consumption Tax for Doing Business in Japan