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Japan company tax calculation

Japan company tax calculation

Information of calculation of company tax in Japan 

If you want to calculate the amount of tax that your company needs to pay, you can find necessary information in this page.

If you order me to incorporate a company in Japan, you can receive this kind of assist at the same time.

Or if you have already own company or association in Japan and need any assist related to tax, I can assist you.

Some of you do not want to pay expensive fee for bilingual tax accountant.

In Japan, the amount of corporation tax ( Hojin zei = 法人税 ) differs depending on the amount of capital amount (shihonkin) and amount of taxable income ( = kazei shotoku = shotoku ).

If the capital amount ( shihonkin = 資本金 ) of your company is large or taxable income of your company is large, rate of corporation tax becomes higher.

In the case the capital amount of your company is more than 100 million, corporation tax ( hojin zei ) rate is 23.2% ( as of 2020).

In the case the capital amount of your company is 100 million yen or less, corporation tax rate is as below.

・For the amount of taxable income of 8 million yen or less …….. 15.0%
・For the amount of taxable income of more than 8 million yen ……23.2%

Example of calculation of company tax in Japan

ex. Aki Inc. with capital amount 8 million yen and taxable income of 10 million yen.

Roughly speaking, taxable income equal to profit made by the company.

Corporation tax =(8 million yen × 15%)+(2 million yen × 23.2%)= 1,200,000 yen + 464,000 yen = 1,664,000 yen……..①

Calculation of amount of Local Corporation Tax in Japan

And Aki Inc. needs to pay Local corporation tax ( chiho hojin zei ), too.

Chiho Hojin zei (地方法人税=ちほうほうじんぜい) is a kind of national tax. Though name of Chiho Hojin zei is similar to Chiho Hojin Tokubetsu zei, they are different ones. And Chiho Hojin Tokubetsu zei was abolished.

Amount of corporation tax × 10.3% (Rate of local corporation tax) = Local corporation tax.
So, in the case of Aki Inc.

1,664,000 yen × 10.3% = 171,392 yen………②

When you make tax filing paper of corporation tax, you can fill in necessary items of local corporation tax on the same paper and pay it at the same time.

Calculation of amount of Corporation Business Tax in Japan

How to calculate amount of corporation business tax ( Hojin jigyo zei = 法人事業税)

In the case your company is located in ward ( ku ) in Tokyo prefecture.

・Taxable income is 4 million yen or less:tax rate is 3.5%
・Taxable income is 4 million yen~8 million yen :tax rate is ×5.3%
・Taxable income is more than 8 million yen:tax rate is 7.0%

So, in the case of Aki inc., (though there are some differences between taxable income of corporation tax and that of business tax)
4 million yen  x  3.5% = 140000 yen.
4 million yen  x 5.3% = 212000 yen
2 million yen x 7.0% = 140000 yen.
In total 492,000 yen…..③

p.s. In the case capital amount is 100 million yen or more, size based business tax ( gaikei hyojun kazei ) is also levied.

Local corporation special tax ( chiho hojin tokubetsuzei ) has been abolished and Special Corporation Business  Tax has been established.

Calculation of Corporation resident tax ( = hojin juminzei = 法人住民税)

Corporation resident tax means corporation prefectural tax ( =道府県民税) + corporation city tax (=市町村民税).

In the case Aki Inc. is located in Wako city, Saitama prefecture.

Corporation resident tax = Saitama prefecture corporation tax amount basis (法人税割) + Saitama prefecture size basis tax (均等割 for prefecture)+ Wako city corporation tax amount basis (法人税割) + Wako city size basis tax (均等割 for city)

1,664,000 yen (Amount of corporation tax) x 1% = 16640 yen…(a  あああ
21000 yen (均等割 for prefecture)…..(b
1,664,000 yen x 6% =99840 yen…(c
47500 yen(均等割 for city)…(d
(a+(b+(c+(d=184,980 yen………………….④

Calculation of amount of Special Company Business tax (Tokubetsu Hojin Jigyozei=特別法人事業税)

When Chiho Hojin Tokubetsu zei was abolished, Special Corporation Business tax (Tokubetsu Hojin Jigyozei) was enacted.

492,000 yen (Amount of Corporation Business tax) × 37% = 182,040 yen…..⑤

 

①+②+③+④+⑤= 2,694,412 yen
2,694,412 yen / 10 million yen = 0.26.

So roughly speaking, total tax amount will be 26%.

This rate is called Jikko zeiritsu.

Though, this rate differs depending on taxable income and capital amount and scale of your company.

However you can think about 30% of profit of your company will be used to pay taxes.

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