Japan Tax Services: Overview
JTAX is able to offer comprehensive and cost-effective corporate tax solutions to foreign clients in Japan.
Our Japan Tax Services are a key component of JTAX’s Japan Outsourcing Services.
Our key tax services include:
- 1Initial tax consulting to help clients understand the Japan tax consequences of establishing different types of company.
- 2Handling the (time sensitive) initial corporate tax filings following the establishment of an entity in Japan.
- 3Providing ongoing corporate tax consulting and compliance for Japanese entities. This includes Japanese corporate tax returns and VAT (Japanese consumption tax) returns.
- 4General consulting with respect to issues such as tax structure (cost-plus / buy-sell, etc.).
Please Contact Us for more information about our Japan Tax Services.
Japan Tax Services - FREQUENTLY ASKED QUESTIONS
Japanese companies (including subsidiaries and foreign branches of Japanese companies) are taxed on their worldwide income.
An important exception to this rule is that a Japanese company may be able to exclude 95% of any dividends received from a foreign affiliate. This is subject to a number of conditions including a requirement that the Japanese company holds at least 25% of the outstanding shares in the foreign affiliate.
A foreign corporation (i.e., a Japan branch of a foreign company or a foreign company with a permanent establishment in Japan) is taxed only on its Japan-source income.
A Japanese company’s income is taxed at both national and local levels. Important taxes include:
a. National Level
- Corporation Tax
b. Local Level (Prefectures and / or Municipalities)
- Inhabitant Tax (prefectures and municipalities)
- Enterprise Tax (prefectures)
- Special Local Corporation Tax (prefectures)
Japan has a system of value added tax (“VAT”) that is generally referred to as Japanese Consumption Tax (“JCT”) in English. The current rate is 8%. Japanese Consumption Tax is applicable to the sale of goods within Japan and also where services are provided in Japan.
Since Japanese enterprise tax (a type of local tax imposed on income) is deductible when paid, the effective Japanese corporate tax rate is less than the total of the statutory rates of corporation tax, inhabitant’s tax, and enterprise tax.
The following table indicates the approximate effective tax rates applicable to small and medium enterprises (“SME”) and large corporations operating in Tokyo:
| Tax Year | Effective corporation tax rate (%) | ||
|---|---|---|---|
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| Beginning on or after 1 April 2015 |
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| Beginning on or after 1 April 2015 |
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