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
|
Taxable base (taxable income) |
Standard tax rates |
|
|
1/4/2021-31/3/2025 |
|
< JPY 4 million |
0.4% |
|
JPY 4-8 million |
0.7% |
|
> JPY 8 million |
1.0% |
Special Business tax
|
Stated capital |
Taxable base |
Tax rates |
|
|
|
|
Before 1-10-2019 |
On and after 1-10-2019 |
|
> JPY 100 mln |
Taxable income |
- |
260% |
|
< JPY 100 mln |
Taxable income |
- |
37% |
Size-based business tax (Stated capital > 100 mln)
|
Components |
Standard Tax rates |
|
Added value component |
1.2% |
|
Capital component |
0.5% |
Source: KPMG
