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

Companies with stated capital > JPY 100 mln

Taxable base
(taxable income)
Standard tax rates
 
1-4-2016- 30-9-20119
1-10-2019 -
< JPY 4 million
0.3%
0.4%
JPY 4-8 million
0.5%
0.7%
> JPY 8 million
0.7%
1.0%

Companies with stated capital >< JPY 100 mln

Taxable base
(taxable income)
Standard tax rates
 
1-4-2016- 30-9-20119
1-10-2019 -
< JPY 4 million
3.4%
3.5%
JPY 4-8 million
5.1%
5.3%
> JPY 8 million
6.7%
7.0%

Special Business tax

Stated capital
Taxable base
Tax rates
 
 
Before 1-10-2019
On and after 1-10-2019
> JPY 100 mln
Taxable income
x Standard rate of business tax
-
260%
< JPY 100 mln
Taxable income
x Standard rate of business tax
-
37%

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

Components
Standard Tax rates
Added value component
12.%
Capital component
0.5%
Source: KPMG

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