How high are the corporate income tax in Japan?
Corporate income tax is assessed on the company’s worldwide income except for foreign companies which are only taxed on their Japan-sourced income. The tax rate is dependent on company size and income.
- Paid-in capital of over 100 million Japanese yen (JPY) with offices or factories in at least three prefectures - 29.74%
- Paid-in capital of JPY 100 million or less, except for a company wholly owned by a company that has paid-in capital of JPY 500 million or more
- Less than JPY4 million per annum - 25.90%
- Over JPY 4 million to JPY 8 million per annum – 27.58%
- Over JPY 8 million per annum - 23.2%
Important Note: Corporate tax payers are also required to pay national corporate tax at a fixed rate of 10.3% of their corporate tax liabilities.
What Double-tax treaties has Japan?
Japan has concluded tax treaties with the following countries not only to avoid double taxation but to encourage investments as well:
Australia, Austria, Bahamas, Bangladesh, Belgium, Bermuda, Brazil, British Virgin Islands, Brunei, Bulgaria, Canada, Cayman Islands, Chile, China, Croatia, Czechoslovakia, Denmark, Ecuador, Egypt, Estonia, Fiji, Finland, France, Germany, Guernsey, Hong Kong, Hungary, Iceland, India, Indonesia, Ireland, Isle of Man, Israel, Italy, Jersey, Kazakhstan, Korea, Kuwait, Latvia, Liechtenstein, Lithuania, Luxembourg, Macao, Malaysia, Mexico, Netherlands, New, Zealand, Norway, Oman, Pakistan, Panama, Philippines, Portugal, Qatar, Russia, Romania, Samoa, Saudi Arabia, Singapore, Slovenia, South Africa, Spain, Sri Lanka, Sweden, Switzerland, Taiwan, Thailand, Turkey, USSR, United Arab Emirates, United Kingdom, United States, Vietnam, and Zambia.