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Calculation of amount of corporate tax, resident tax in Japan

Calculation of amount of corporate tax etc. of Japan (2021)

I will explain how to calculate amount of tax relating to a company in Japan.

Taxable amount is less than 8 million yen

Taxable amount is more than 8 million yen

Assumed that taxable amount of your company in Japan is 1 million yen.

●法人税corporate tax   In this case tax rate is 15% of taxable income.

So 1 million yen * 15% = 150,000 yen ①.

●地方法人税 Local corporate tax is 10.3% of amount of corporate tax.

So 150,000 yen * 10.3% = 15,450 yen ②

●法人住民税の所得割 Corporate resident tax (per income basis) is 7% of  amount of corporate tax.

So 150,000 yen * 7% = 10,500 yen ③

●法人住民税の均等割 Corporate resident tax (per capital basis) is 70,000 yen. ④
(In the case capital amount is less than 10 million yen)

●法人事業税 Corporate business tax is 3.5% of taxable income

So 1 million yen * 3.5% = 35,000 yen ⑤

There was a tax named 地方法人特別税. However it was abolished.

●特別法人事業税 Special corporate business tax is 37% of amount of 法人事業税 Corporate business tax.

So 35,000 yen * 37% = 12,950 yen ⑥

In total ①+②+③+④+⑤+⑥= 293,900 yen.

●Gross effective tax

293,900 yen – ④ = 223,900 yen.

223,900 yen / 1 million yen * 100 = 22.39%.

So gross effective tax rate of company is 22.39%.

corporate tax calculation sheet 1 million yen

You can download excel file here.
Calculation of corporate tax of Japan Sheet

Assumed that taxable amount of your company in Japan is 10,000,000 yen.

corporate tax calculation sheet 10 million yen

●法人税corporate tax   

Up to 8 million yen (taxable amount), tax rate is 15% of taxable income.

So 8 million yen * 15% = 1,200,000 yen 

More than 8 million yen, (taxable amount), tax rate is 23.2% of taxable income.

So 2 million yen * 23.2% = 464,000 yen

1,200,000 yen + 464,000 yen = 1,664,000 yen ①.  

●地方法人税 Local corporate tax is 10.3% of amount of corporate tax.

So 1,664,000 yen yen * 10.3% = 171,392 yen ②

●法人住民税の所得割 Corporate resident tax (per income basis) is 7% of  amount of corporate tax.

So 1,664,000 yen * 7% = 116,480 yen ③

●法人住民税の均等割 Corporate resident tax (per capital basis) is 70,000 yen. ④
(In the case capital amount is less than 10 million yen)

●法人事業税 Corporate business tax.

up to 4 million yen, 3.5% of taxable income
From 4 million yen to 8 million yen, 5.3% of taxable income
From 8 million yen, 7% of taxable income

So
4 million yen * 3.5% = 140,000 yen
4 million yen * 5.3% = 212,000 yen
2 million yen * 7% = 140,000 yen
Subtotal      492,000 yen ⑤

There was a tax named 地方法人特別税. However it was abolished.

●特別法人事業税 Special corporate business tax is 37% of amount of 法人事業税 Corporate business tax.

So 492,000 yen yen * 37% = 182,040 yen ⑥

In total ①+②+③+④+⑤+⑥= 2,695,912 yen.

●Gross effective tax

2,695,912 yen – ④ = 2,625,912 yen.

2,625,912 yen / 10 million yen * 100 = 26.2%.

So gross effective tax rate of company is 26.2%.

You can download excel file here.
Calculation of corporate tax of Japan Sheet