Asia-Pacific · Tax guide
Japan
Japan taxes large companies at about 30% in total, combining national corporate tax of 23.2% with local taxes, and gives SMEs a lower rate on their first slice of income. Consumption tax is 10% (8% on food and newspapers), with qualified invoices required to claim credits. Taxes are administered by the National Tax Agency (NTA).
At a glance
- National corporate tax
- 23.2%
- SME rate
- 15%
- Consumption tax
- 10%
- Exemption threshold
- ¥10,000,000
- Withholding on payments abroad
- 20.42%
- Global minimum tax
- 15%
about 30% including local taxes
On the first ¥8,000,000 of income
8% on food and newspapers
Base-period taxable sales
Before treaty relief
Groups with revenue of €750 million or more
Corporate taxes
Companies pay national corporate tax at 23.2% plus local corporate tax, inhabitants' tax and enterprise tax, for an effective about 30% for large companies. Smaller companies, measured by share capital, pay 15% on their first ¥8,000,000 of income. Returns are due two months after the year-end, with interim payments.
Consumption tax and qualified invoices
Consumption tax is charged at 10%, with 8% on food and newspapers; food and drink falls to 1% from 1 April 2027 to 31 March 2029. Businesses with base-period taxable sales of ¥10,000,000 or less are exempt.
Customers can only claim input credits on invoices from registered qualified invoice issuers, so many small suppliers register anyway. A transitional measure eases the cost for those who registered: 30% of output tax for sole proprietors in their 2027 and 2028 returns (the 20% measure ended on 30 September 2026).
Withholding tax on payments abroad
Dividends, royalties and loan interest paid to non-residents carry 20.42% withholding, including the reconstruction surtax (15.315% on dividends from small holdings in listed companies). Treaty rates apply when the recipient files the treaty application form before payment.
Transfer pricing and the global minimum tax
Related-party transactions must be at arm's length. A contemporaneous local file is required when transactions with a foreign related party reach ¥5 billion a year, and a master file when group revenue reaches ¥100 billion. Groups with revenue of €750 million or more are subject to the global minimum tax at 15%.
Key dates
- Two months after the year-endCorporate tax and consumption tax returns (extensions available for corporate tax)
- Six months into the yearInterim corporate tax payment
- By the 10th of each monthWithheld tax on salaries and payments abroad
Figures and sources
15 figures- Effective combined rate including local taxes (large companies)about 30%Checked against the official source
- National corporate tax rate23.2%Checked against the official source
- Consumption tax standard rate (national and local)10%Checked against the official source
- Consumption tax reduced rate (food and newspapers)8%Checked against the official source
- Reduced national rate for SMEs on the first slice of income15%Checked against the official source
- Annual income taxed at the SME rate (companies with capital of ¥100 million or less)¥8,000,000Checked against the official source
- Taxable sales in the base period at or below which a business is exempt¥10,000,000Checked against the official source
- Withholding on dividends, royalties and loan interest paid to non-residents (before treaty relief)20.42%Checked against the official source
- Global minimum tax rate (income inclusion rule from 2024; domestic top-up and UTPR from April 2026)15%Under professional review
- Group revenue for the global minimum tax€750 millionUnder professional review
- Temporary consumption tax rate on food and drink (April 2027 to March 2029)1% from 1 April 2027 to 31 March 2029Under professional review
- Transitional payment measure for sole proprietors who became qualified invoice issuers30% of output tax for sole proprietors in their 2027 and 2028 returns (the 20% measure ended on 30 September 2026)Checked against the official source
- Withholding on dividends from listed shares (holdings under 3%) paid to non-residents15.315%Checked against the official source
- Annual transactions with a foreign related party at which a contemporaneous local file is required¥5 billionUnder professional review
- Group revenue at which a master file is required¥100 billionUnder professional review
Indicative only. This assessment is a high-level overview of tax obligations in Japan based on the information you provided and rules in force for 2026. It is not tax or legal advice. Consult a Japanese certified tax accountant (zeirishi) before making compliance decisions.