Local Enterprise Tax

Enterprise or Business tax (Jigyōzei) is a tax levied by the prefecture where your business operates. The tax is levied on taxable corporate income base and levied on value-added and capital appropriate based upon the pro-forma business size such as the number of employees and amount of capital if larger that 100 million JPY. If a company is involved in electricity/gas supply or insurance business the tax is impose on the adjusted gross revenue.

Tokyo Metropolitan Government offers a detailed explanation regarding business tax. Tax payers must file a return and pay business tax together with special corporate enterprise tax and inhabitant tax on corporations.

Notes:

• Special local corporation tax, which was a temporary fiscal measure in place since 2008 was abolished after October 1, 2019 and replaced by a new Special Corporate Enterprise Tax. This new tax is permanent and will allocated to local governments in order to decrease the gap in tax revenues between urban and rural areas
• Business tax and Special corporate enterprise tax are tax deductible expense when tax returns for such taxes as file.

Enterprise tax on income

Special Business tax

Size-based business tax (Stated capital > 100 mln)

Source: KPMG