Tax matters

Submission of reports/applications after Incorporation

After the incorporation, it is required to submit reports/applications to National Tax Office, Prefectural Tax Office and Municipal Tax office.

Taxes

The company basically has to file the final Corporate Tax returns within 2 months after the end of the fiscal year (extension can be applied).

The highest effective tax rate is 33.59% and the lowest tax rate is 25.99%  for the company whose share capital is JPY 100 Million or less and located in Kawasaki. (Information as of 2020)

Share Capital plusAdditional paid-in　capital		Number of employees	Per-capita inhabitants tax
From	To		Prefectural	Municipal	Total
more than 5,000,000,000		more than 50	800,000	3,000,000	3,800,000
		50 or less		410,000	1,210,000
1,000,000,001 to 5,000,000,000		more than 50	540,000	1,750,000	2,290,000
		50 or less		410,000	950,000
100,000,001 to 1,000,000,000		more than 50	130,000	400,000	530,000
		50 or less		160,000	290,000
10,000,001 to 100,000,000		more than 50	50,000	150,000	200,000
		50 or less		130,000	180,000
10,000,000 or less		more than 50	20,000	120,000	140,000
		50 or less		50,000	70,000

Taxable enterprise has to file the final Consumption Tax return within 2 months after the end of the taxable period (extension cannot be applied).

The Consumption Tax rate is 10%, and the basic formula to calculate the Consumption Tax due is as follows.

Tax Due = Consumption Tax on Sales － Consumption Tax on Purchases

Note:
Enterprise whose taxable sales during the base period (two business years prior to the current business year) is 50 million yen or less, may choose “Simplified Tax System” which deducts the Consumption Tax on sales multiplied by a certain rate as Consumption tax on purchases.

Where the amount of taxable sales of an enterprise in the base period is 10,000,000 Yen or less, the enterprise will be basically exempt from consumption tax during the taxable period.

Corporations are basically exempt from consumption tax during their first and second business years, because there are no taxable sales for the base periods. Where a corporation is established with its capital of 10,000,000 Yen or more, it is not exempt from consumption tax during its first and second business year

There are the following taxes in Japan.
– Individual Income Tax
– Fixed Asset Tax
– Property Tax
– Registration and License Taxes
(Commerce Registration, Real Property registration)
– Stamp Tax
– etc.