Japan Income Tax rate for 2017-18Japan Income Tax Rate  for 2017-2018. Individual income Tax Rates for Resident and Non Resident. Capital Gain Tax and Corporate / Companies taxes.

 

 

Japan Individual Income Tax Rate for 2017-2018 (2017 or later)

Taxable Income (Yen) Tax Rate
0 to 1,950,000 5%
1,950,001 to 3,000,000 10%
3,000,001 to 6,950,000 20%
6,950,001 to 9,000,000 23%
9,000,001 to 18,000,000 33%
18,000,001 to 40,000,000 40%
Over 40,000,000 Yen 45%

 

For Employment income the following deductions are allowed 2017 onwards

Employment Income (Yen) Deduction of Employment Income (Yen)
0 to 1,625,000 650,000
1,625,001 to 1,800,000 Employment Income X 40%
1,800,001 to 3,600,000 Employment Income X 30% + 180,000
3,600,001 to 6,600,000 Employment Income X 20% + 540,000
6,600,001 to 10,000,000 Employment Income X 10% + 1,200,000
10,000,001 to 12,000,000 2,200,000 Yen
Over 12,000,000 Yen 2,300,000 Yen

 

Concept of Residence

Residents

Persons having a domicile in Japan and persons having a residence in Japan for one year or more are termed residents. The worldwide income of residents, regardless of the location of the source of income, is subject to income tax.

Non-permanent residents

Residents having no Japanese citizenship and having a domicile or residence in Japan for five years or less within the period of ten years are non-permanent residents. The scope of taxation for non-permanent residents corresponds to that for residents, but tax will not be assessed in Japan on income sourced outside Japan as long as that income is not paid within Japan or is not remitted to Japan. However, the salary paid based on the work in Japan is applicable to domestic-sourced income even if it is paid outside Japan, and income tax will be assessed summing the salary paid within and outside Japan.

 

Non Residents

Persons who are not qualifying as residents are termed as non-residents.

 

Withholding Tax on Residents

The following income of residents are subject to withholding tax:

- Interest
- Dividends
- Salary, wages, bonuses and similar compensation
- Retirement allowances
- Compensation, fees, etc., to certain professionals

 

Withholding tax on Companies / Corporations

The following income received by companies are subject to withholding tax

- Interest

- Dividend

 

Capital Gain Tax in Japan

Residents Working and living in Japan

Description Income Tax Municipal Tax Tohoku Reconstruction Tax
Property held for less than 5 years 30% 9% 2.10%
Property held for more than 5 years 15% 5% 2.10%

 

Non Residents living overseas

Description Income Tax Tohoku Reconstruction Tax
Property held for less than 5 years 30% 2.10%
Property held for more than 5 years 15% 2.10%

 

 

Corporate / Company Income Tax Rate in Japan for 2017-2018

Business starting date Small Medium sized Enterprises

Taxable Income (Yen)

Enterprises
  0- 4 Million 4 Million to 8 Million Over 8 Million Other than SME
01.04.2015 to 31.3.2016 2.142% 23.2% 34.33% 32.11%
01.04.2016 to 31.3.2017 21.42% 23.20% 33.80% 29.97%
01.04.2017 to 31.3.2018 25.99% 27.57% 33.80% 29.97%
On or after 01.04.2018 25.99% 27.57% 33.59% 29.97%

 

Note 1. Small and Medium sized enterprises should meet all the three conditions:

- Paid-in capital is 100 million yen or less. This does not apply to wholly-owned subsidiaries of large corporations with paid-in capital of 500 million yen or more.


- Corporate tax amount is 10 million yen or less per annum and taxable income is 25 million yen or less per annum.


- Offices or factories located in up to two prefectures.

 

Note 2. As the extension of the special measures of reduced tax rates for small and medium-sized enterprises has not been announced, the rates are reference tax rates on the assumption that the special measures will be abolished on March 31, 2017

 

Note 3. Enterprises other than small and medium-sized enterprises are the enterprises with the paid-in capital of over 100 million yen and offices or factories located in at least three prefectures. The effective tax rates for these enterprises are calculated using the standard tax rates.

 

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