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Tax in Japan Calculator - Corporate Tax

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Description
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Scenario 1
Scenario 2
Affects the rates used for each tax type.
Companies with paid in capital more than 100M JPY are subject
to Size Based Enterprise Tax.
Different prefectures have different tax rates.    
   
   
Amounts more than 100M JPY will affect the tax rate used for each tax
and companies must pay Size Based Enterprise Tax.
Is added to Paid In Capital to determine the total capital
which is required to calculate the correct tax rate for each element.
The business is considered as a large company for the
tax calculation if it is 100% owned by another corporation
with PIC more than 500M JPY.
The number of offices affects Size Based Enterprise Tax
& if more than 2 in different prefectures, attracts a higher rate for Enterprise Tax and
Inhabitants Per Capita Tax. *1 This calculator assumes each office is located in a different prefecture.
Affects the amount charged for Metropolitan & Municipal Inhabitants Per Capita Tax.
Monetary value subject to tax, the taxable income is used
as a base figure to calculate each element of tax.
Add as much detail as possible to get the most accurate tax estimation.
Actual or expected income or loss.
Figures entered here are added to the taxable income,
making the taxable income higher and increasing tax liability.
Total of all interim Corporate taxes incurred throughout the year.
Corporate Tax includes Corporation Tax (National) & Corporation Tax (Local).
Total of all interim Prefectural
& Municipal tax incurred throughout the year.
Total of all unpaid taxes from previous accounting period.
Total of excess overdepreciation. E.g. Fixed Asset
has a useful life of 5 years but is depreciated over 3.
2 types of director salary are deductible, monthly salary (if equal each month)
& periodic salary (e.g. quarterly) if the tax office is notified.
Other salary monies paid must be entered here as they are not tax deductible.
Reasonable amounts of director bonus are allowed to be deducted.
Reasonable is defined by looking at similar companies in the same industry &
similar job description and paying a comparable amount.
Unreasonable, or sudden bonuses (performance etc.) must be entered here.
Only a portion of tax deductible entertainment expenses can be deducted from corporation tax.
PIC<=100M JPY: 50% of entertainment expense or 8M JPY.
PIC>100M JPY, 50% entertainment expense. The remainder must be entered here.
Reasonable retirement allowances are tax deductible. Reasonable is defined as:
Monthly salary at retirement * years of service. Amounts above this should be entered here.
Expenses that either do not exist, incorrect, or are overinflated must be entered here.
E.g. a business trip with overstated travel costs,
incorrect expense amounts, double expense submissions etc.
Remaining paid leave is not tax deductible.
The cost of accrued leave not yet taken is entered here.
Unreasonable bonus amounts to employees must be entered here.
Reasonable is defined as a comparable amount to a
person with a similar job description in the same industry.
Figures entered are subtracted from the taxable income,
making the taxable income lower and decreasing tax liability.
Total of insufficient depreciation i.e. assets that weren't depreciated enough.
E.g. Assets that were incorrectly depreciated using a longer useful life
than necessary or an incorrect depreciation method
(reducing balance instead of straight line).
Enterprise Tax already paid.
Total interim payments of Corporate, Prefectural &
Municipal tax & tax refunds received.
Refund received due to losses carried back.
Only small to medium companies with blue return status
can carry losses back up to a maximum of 1 year.
Up to 50% of losses can be brought forward from up to
10 years of when the loss was incurred. Must have blue
return status in the loss making year to be eligible.
to enter information for this section.
Total of employee salary, bonus & retirement allowance
Total of interest paid - interest received on:
loans, late taxes, finance leases etc.
If total is less than 0, enter 0.
Total of rent paid - rent received.
If total is less than 0, enter 0.
National Taxes are collected by the National Tax Agency (NTA).
Local Taxes are collected by the local tax office
of a municipality or ward.
Payable to the National Tax Agency (NTA) within
2 months of business year end. Paid via eTax, an online
portal system for national taxes. 		    Scenario 1     Scenario 2   Δ S1-S2
Payable to the local government within
2 months of business year end. Paid via eLTax, an
online payment portal for local taxes.
             
      Scenario 1     Scenario 2    
Tax levied on the income of a business, generated by its activities.
Calculated according to the taxable income. 		       
               
Collected by the NTA, then allocated to local governments around Japan.
Levied on Corporation Tax (National).
10.3%
             
Local taxes are collected by the local tax office
of a municipality or ward. 		               
Local tax levied on businesses and payable to the local government.
Within Tokyo 23 wards, the Tokyo Metropolitan Government. 		       
             
Additional tax charged to companies with PIC > 100M.                
                 
             
                 
70% 70%
                 
                 
             
                 
               
               
New tax introduced from October 2019 in place of "Special Local Corporate Tax".
It is levied on the amount of Enterprise Tax (Taxable Income Levy). 		       
Tax levied in major cities used to support the running costs of the community
of the area of where the office is located. There are 2 components,
National Corporate Tax Levy & Per Capita Levy. 		               
Metropolitan Tax levied on National Corporate Tax.
The rate depends on the office location, PIC & National Corporate Tax amount. 		       
                 
             
Metropolitan Tax levied on number of employees.
The amount depends on the office location, number of offices,
number of employees & PIC.
Emp < 50 Emp > 50
Emp < 50 Emp > 50
               
Tax levied in each prefecture used to support the running costs of
the community of the area of where the office is located. There are 2 components,
Capital Levy & National Corporate Tax Levy.
Municipal Inhabitant's Tax is applicable to locations outside Tokyo's 23 wards as Tokyo's Municipal Inhabitant's Tax is included in the Metropolitan Tax. Amount depends on location and PIC.
Municipal Inhabitants Tax is applicable to locations outside
Tokyo 23 wards as the Tokyo Municipal Inhabitants Tax is included
in the Metropolitan Tax. Rate depends on location,
PIC & National Corporation Tax Amount. 		       
                 
             
               
             

These payroll calculators are not intended nor are they a substitute for professional advice. These payroll calculations are complex and qualified professional payroll advice should be obtained prior to taking any action.

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