Outline of Corporate tax|
A corporation in Japan is required to file returns, pay tax and supply details of the computation of taxable income to the Japanese tax office.
The place of tax payment of a domestic corporation is the place where its head or main office is located.
In case of a foreign corporation, the place of the payment is where the corporation's main permanent establishment or estate in Japan is located.
For a corporation whose capital exceeds JPY 100million, a tax rate of 30% is applicable to all of the ordinary income.
For a corporation whose capital amounts to JPY 100million or less, a tax rate of 22% is applicable up to JPY 8million and a tax rate of 30% to the remainder of the ordinary income.
A corporation is required to file a final tax return within 2 months after the end of its business year.
A final tax return must be accompanied by the balance sheet, profit and loss statement and other documents describing items necessary for calculating its ordinary income, undistributed income and the corporation tax due.
If the ordinary income shows a net loss, the net loss can be carried forward to the five succeeding years, which is deductible from the income of each business year.
Foreign corporations, which do not have their head office in Japan are classified for tax purposes as follows:
Foreign corporations carrying on business through a branch office are subject to corporation tax on their entire income sources in Japan.
Foreign corporations carrying on business not through permanent establishments but through an agent in Japan who has the authority to conclude contracts or important activities are subject to corporation tax on the income derived from a business in Japan.