Consumption taxes

Nature of the tax

Japanese Consumption Tax (JCT).

Tax rate

National consumption tax :4%
Calculated on the total amount of sales (excluding sales not subject to tax) and once the total amount of purchases subject to tax has been deducted.

Local consumption tax : 1%
Calculated on the total amount of consumption tax due.

Reduced tax rate

None

Other consumption taxes

Other consumption taxes are levied at the national level and the local level: liquor tax, tobacco tax, gasoline tax, aviation fuel tax, liquefied petroleum gas tax, petroleum tax, motor vehicle tax, etc.

Corporate taxes

Tax rate

Tax rate for foreign companies

Resident companies are taxed on their worldwide income; non-resident companies are taxed only on Japanese-source income. A company that has its principal or main office in Japan is considered to be resident. For additional information.

Capital gains taxation

Taxed at the corporate tax rate.
Capital gains tax on land transfers is subject to a specific method of calculation.

Main allowable deductions and tax credit

Bad debt, repairs, natural disasters, charitable donation, R&D expenses, etc.

Other corporate taxes

Stamp tax, registration and license tax.

Individual taxes

Tax rate

Allowable deductions and tax credit

Dependent spouse, young children, disabled and elderly dependents, social insurance, etc.

Special expatriate tax regime

No special expatriate tax regime in Japan.

Pour aller plus loin dans vos recherches nous vous proposons de connaître les taxes locales qui s'appliquent à votre produit.

Double taxation treaties

Countries with whom a double taxation treaty have been signed

See the list of double Taxation Agreements

See the list of Japanese Tax Treaties.

Withholding taxes

Dividends: 20%, Interest: 20%, Royalties: 20%

Bilateral agreement

Japan and the United Kingdom are bound by a double taxation treaty: Yes

For more information

All information on Double Taxation Agreements on the website of the HMRC

HM Revenue & Customs website

We can find you the local taxes that apply to your product for you.

Accounting Rules

Tax year

From January 1st to December 31st.

Accounting standards

The Japanese “Generally Accepted Accounting Principles (GAAP)” is made up of:
- Business Accounting Principles issued by the Business Accounting Council (BAC);
- Accounting Standards issued by the Accounting Standards Board of Japan (ASBJ);
- Practical Guidelines issued by the JICPA.

Accounting regulation bodies

BAC
ASBJ
JICPA
FASF

Accounting reports

The Commercial code gives the required regulations for a Limited Liability Company (Kabushiki Kaisha) to prepare an annual report and appendix.The annual report must be submitted to the general assembly of shareholders and must include the balance sheet and the income statement.

Publication requirements

Only companies quoted in the stock-exchange have to publish their accounts. According to the law of transferable securities and the law of exchange, registrants must file to the Ministry of Finance the annual and biannual statement reports, as well as a copy in the foreign exchange markets where transferable securities are registered.

Professional accountancy bodies

JICPA
Tokyo certified public tax accountants’ association

Certification and auditing

Companies have to seek a statutory auditor to conduct an annual audit of the financial health of their organization. You can contact the Board of Audit of Japan, the Japan Corporate Auditors Association (JCAA) and the Certified Public accountants and auditing oversight board

Accounting news

Accounting news in Japan
Accounting diary in Japan
Japan accounting news on einnews.com