Corporate Taxation

Corporate Taxation

For corporate tax, corporations are divided into two categories: domestic corporations and foreign corporations. Domestic corporations are defined as all corporations that have their head offices in Japan. Also, subsidiaries of foreign corporations established in Japan are regarded as domestic corporations. Foreign corporations are those, which are not considered domestic, as well as branch offices or manufacturing plants set up in Japan by foreign corporations [1].

The tax base for determining corporate taxes stems from the income generated in the business year. The four main types of corporate income tax in Japan are as follows:

  • Corporate tax (national)
  • Corporate inhabitant tax (local)
  • Enterprise tax (local)
  • Special local corporate tax (national but filings/payments are made to local governments with Enterprise tax) [2]


[1] Japan Federation of Certified Public Tax Accountants' Associations, Guide to Japanese Taxes, 2012

[2] JETRO, Taxes in Japan: Overview of Japanese Corporate Tax System for Investment in Japan, 2013