Tax Planning in Japan

Tax planning in Japan is complex and requires the assistance and expertise of an experienced tax consultant. Healy Consultants can assist with all aspects of tax planning in Japan, the salient points of which are outlined below:

The most important aspect of tax planning in Japan is that all Japanese companies are liable to pay corporation tax, the rate of which varies according to the company's capital. For a company with a minimum capital of 100 million yen (US$980,000), the tax rate is 30%. However, for a company with capital of less than 100 million yen, the tax rate is 22% for the first 8 million yen, then 30% thereafter.

When tax planning in Japan, all Japan-sourced income is taxed. All income sourced overseas benefits from the Double Taxation Agreements Japan has with over 56 nations. As a result, foreign sourced income may not be liable to tax in Japan.

When tax planning in Japan, all Japanese companies are required to file an annual tax return to Japan's National Tax Agency within two months of the end of its tax year. The tax return should include a balance sheet, profit and loss statement and other documents describing items necessary for calculating its ordinary income, undistributed income and the corporate tax due.

When tax planning in Japan, companies are subject to a capital gains tax of 30%.

When tax planning in Japan, companies are subject to a consumption tax of 5%.

When tax planning in Japan, net losses can be carried forward for five years.