Even though Japan is know as a highly centralized state, local administrations have some discretion in setting their own taxation system. However, Japanese Law does not give broad possibilities of taxation for the local governments, they are only able to set a rate between a minimum and a maximum fixed by national law.
The Local or Corporate Enterprise Tax is a local tax levied against profit after subtracting expenses (they will not be levied when loss is incurred) and through self-assessment. It works along similar lines as national corporate taxation.
|
Tax base |
Paid-in capital of JPY 100 million or less (≈ EUR 700 000) i.e. SMEs |
|
|
Standard rate |
Maximum rate |
|
|
Taxable income up to JPY 4 million in a year (≈ EUR 28 000) |
2.7% |
2.95% |
|
Excess over JPY 4 million (≈ EUR 28 000) and up to JPY 8 million in a year (≈ EUR 50 000) |
4% |
4.365% |
|
Excess over JPY 8 million (≈ EUR 50 000) |
5.3% |
5.78% |
|
Offices in at least three different prefectures and capital of at least JPY 10 million (≈ EUR 70 000): only rate applicable |
5.3% |
5.78% |