Inhabitant taxes

Inhabitant taxes are local prefectural and municipal taxes. These taxes are computed as a percentage of the national Corporation tax before tax credits. Each prefecture and municipality may select an Inhabitants Tax rate within the range shown below:

 

Prefecture

5% to 6% of the national Corporate tax rate

Municipality

12.3% to 14.7% of the national Corporate tax rate

 

This results in the following the effective Inhabitant tax rates:

 

Tax Base

Capital up to JPY 100 million (≈ EUR 700 000) i.e. SMEs

Prefecture

Taxable income up to JPY 8 million in a year (≈ EUR 50 000)

0.75% to 0.90%

Taxable income in excess of JPY 8 million

1.275% to 1.53%

Municipality

Taxable income up to JPY 8 million in a year (≈ EUR 50 000)

1.845% to 2.205%

Taxable income in excess of JPY 8 million

3.1365% to 3.7485%

 

Prefectural and municipal inhabitant per capita tax

In addition to the above, local administrations charge a per capita levy on inhabitants (including companies) with standard rates that vary depending upon the amount of the paid-in capital and the number of employees. It means this tax has to be paid whatever the business income is. Inhabitant taxes are imposed on taxpayers who have a domicile in Japan on January 1st of the current year.

 

Prefectural inhabitant per capita tax

The tax amount varies based on the total of paid-in-capital and capital surplus of the company. 

Capital amount

Tax

Up to JPY 10 million (≈ EUR 70 000)

JPY 20 000

Over JPY 10 million (≈ EUR 70 000) and up to JPY 100 million (≈ EUR 700 000)

JPY 50 000

 

Municipal inhabitant per capita tax

 The tax amount varies based on the total of paid-in-capital and capital surplus of the company and number of staff employed in the municipality concerned.

 

Capital amount

Number of employees

Tax

Up to JPY 10 million (≈ EUR 70 000)

50 or less

JPY 50 000

Over 50

JPY 120 000

Over JPY 10 million (≈ EUR 70 000) and up to JPY 100 million (≈ EUR 700 000)

50 or less

JPY 130 000

Over 50

JPY 150 000

 

The amount of the tax and the scale may vary in each prefecture and municipality. Please check the local administrations for more details.

 

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