Japan 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
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.
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.
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:
- 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
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)
|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.