🇯🇵 Japan · Tax System
Corporate tax, VAT/GST, personal income tax, capital gains, and filing obligations.
Quick answer
Japan levies national income tax (National Tax Agency) plus local inhabitant tax, and a consumption tax on most goods and services. Residents are taxed on worldwide income, with distinct rules for non-permanent residents.
Taxes are administered by the National Tax Agency (NTA). Companies pay national corporate tax plus local corporate taxes, and consumption tax applies to most goods and services.
- The national corporate tax rate is 23.2%; combined with local taxes the effective rate is higher.
- The consumption tax (VAT-equivalent) standard rate is 10%, with a reduced 8% rate for some items.
- Filing and payment are handled through the NTA's e-Tax system.
Step-by-step
- 1
Determine your residency category
Japan taxes by residency: non-permanent residents, permanent residents and non-residents are taxed differently; permanent residents are taxed on worldwide income.
- 2
Register with the tax and municipal offices
You are registered through your municipality (resident tax) and the tax office (national income tax); employees are set up by their employer.
- 3
Understand the taxes that apply
Identify national income tax, local inhabitant (resident) tax, consumption tax (business), and social-insurance contributions.
- 4
Have tax withheld and year-end adjusted
Employers withhold income tax monthly and perform a year-end adjustment (nenmatsu chōsei); many employees then need no return.
- 5
File a return if required
File a final income tax return (kakutei shinkoku) between mid-February and mid-March if you have other income or are not fully adjusted at source.
- 6
Pay, keep records and get advice
Pay any balance, keep records, and get advice for foreign income and the resident-tax timing.
Checklist
- Residency category determined (non-permanent/permanent/non-resident)
- Municipal + tax-office registration
- Applicable taxes identified (income tax, inhabitant tax, consumption tax, social insurance)
- Monthly withholding + year-end adjustment
- Final return (kakutei shinkoku) if required
- Foreign-income treatment checked
- Records kept
- Advice for resident-tax timing/foreign income
Official authorities
- National Tax Agency (NTA)
National tax authority.
Frequently asked questions
What is inhabitant tax?
A local (prefectural and municipal) tax on the prior year's income, billed separately from national income tax and typically around 10%.
Are foreigners taxed on foreign income?
Non-permanent residents (broadly, under five years) are generally taxed on Japan-source income plus foreign income remitted to Japan; longer-term residents are taxed on worldwide income.
What is the consumption tax?
Japan's consumption tax is a VAT-style tax applied to most goods and services at the standard rate.
Official-information aggregation, not legal advice. Always verify on the authority's own site.
Government portals
- Prime Minister's Office of Japan — Official site of Japan's Prime Minister — cabinet policies, press conferences, policy statements
- Ministry of Foreign Affairs of Japan — Japan visa applications, overseas safety info, consular services, and diplomatic policy
- Immigration Services Agency of Japan — Residence status, work visas, permanent residency, and naturalization in Japan
- National Tax Agency (Japan) — Income tax, corporate tax, consumption tax filing and e-Tax online submission