Corporate Tax in Japan (2026): Rates, Deadlines and Filing Rules

Corporate tax in Japan (法人税, hojinzei), also called corporation tax, is a bundle of national and local taxes on company profit. The national tax rate is 23.2%. Small and medium sized enterprises pay 15% on their first ¥8 million of taxable income.

Local taxes push the combined rate to about 30% for large companies. A new 4% defense tax applies to fiscal years beginning on or after April 1, 2026. You file the final return form within two months of your fiscal year-end.

This guide covers rates, calculation, deadlines and filing. It also explains what foreign corporations need to know before operating in Japan. Still setting up? Start with our guide to company incorporation in Japan.

Note: This article is intended to provide general information only and should not be relied upon as legal or tax advice.

Corporate tax in Japan: key facts for 2026

Question	Answer
National tax rate	23.2% of taxable income
SME rate (capital ¥100M or less)	15% on the first ¥8M; 17% if annual income exceeds ¥1 billion
Effective rate	About 30% for large companies. SMEs pay about 21% to 25% on their first ¥8M and 33% to 35% above it.
New for 2026	Defense special corporate tax: 4% of corporate tax above ¥5M, for fiscal years beginning on or after April 1, 2026
Minimum tax when loss-making	Per capita inhabitant tax, from ¥70,000 a year
Final return due	Within two months of the fiscal year-end
Interim return	Due if corporate tax for the previous fiscal year exceeded ¥200,000
Who pays	Domestic corporations on worldwide income; foreign corporations on income attributable to Japan

Important for foreign companies: you can file online, but the tax authorities still post payment slips and notices to your registered address in Japan. A missed letter means a missed due date and automatic charges.

Corporate tax rates in Japan for 2026

Japan's national corporate tax rate is 23.2%. Small and medium sized enterprises pay a lower rate on their first ¥8 million. Several national and local taxes are then levied on top of it.

Japan's corporate income taxes at a glance

Tax	Levied by	Tax base	Standard rate
Corporate tax (法人税)	National government	Taxable income	23.2%. SMEs: 15% on the first ¥8M
Local corporate tax (地方法人税)	National government	Corporate tax amount	10.3%
Defense special corporate tax (防衛特別法人税)	National government	Corporate tax amount minus ¥5M	4%, fiscal years beginning on or after April 1, 2026
Corporate inhabitant tax, corporate levy (法人税割)	Prefecture and municipality	Corporate tax amount	1.0% prefectural plus 6.0% municipal; higher in large cities
Corporate inhabitant tax, per capita levy (均等割)	Prefecture and municipality	Capital and number of employees	From ¥70,000 a year
Enterprise tax (法人事業税)	Prefecture	Taxable income	SMEs: 3.5%, 5.3% and 7.0% by income band
Special corporate enterprise tax (特別法人事業税)	National, paid with enterprise tax	Enterprise tax amount	37% for most SMEs

Sources: JETRO, Mie Prefecture tax guide, Shizuoka Prefecture on size-based enterprise tax.

Prefectures and municipalities can set higher rates within legal limits. Check your local government's rates before you budget.

SME rates in 2026

A company with stated capital of ¥100 million or less counts as an SME for the national rate. It pays:

• 15% on the first ¥8 million of taxable income

• 17% on that first ¥8 million if annual income exceeds ¥1 billion (fiscal years beginning April 1, 2025 or later)

• 23.2% on income in excess of ¥8 million

SMEs that belong to a large group do not qualify. The reduced rate applies to fiscal years beginning by March 31, 2027. SMEs can also claim a tax credit for wage increases or certain investment in equipment.

The equivalent credit for large companies ended for fiscal years beginning after March 31, 2026.

👉 For grants as well as tax credits, see subsidies for startups in Japan.

Effective corporate tax rate in 2026

The effective rate combines all the taxes above. Typical figures:

• Large companies: about 30%

• SMEs, first ¥8 million: about 21% to 25%

• SMEs, income above ¥8 million: about 33% to 35%

The defense tax adds roughly 0.8 to 1.0 points for companies whose corporate tax exceeds ¥5 million.

The new defense special corporate tax

The 2025 tax reform created a defense special corporate tax. It applies to fiscal years beginning on or after April 1, 2026.

The tax is 4% of your corporate tax, after a ¥5 million deduction. A company with ¥10 million in corporate tax pays ¥200,000. Every corporation must file the return, even when no tax is due.

Larger companies: size-based enterprise tax

Companies with capital over ¥100 million use a wider taxable base for enterprise tax: income plus value added and capital.

Since fiscal years beginning April 1, 2025, the rule also covers some smaller companies. These have ¥100 million or less in capital but paid-in capital (capital plus capital surplus) over ¥1 billion.

Minimum tax for loss-making companies

The per capita levy applies even when a company makes a loss. It starts at ¥70,000 a year in Tokyo's 23 wards. Larger companies with more capital and employees pay more on a per capita basis.

👉 Julia Rivera of Otani Accounting Offices covers other startup tax points in "6 Essential Points Startups Should Know About Japan's Tax Regulations."

Who must pay corporate tax in Japan?

Corporate tax depends on legal structure and business presence, not nationality. Japanese law sorts every company into one of two groups. That group sets your tax base.

Domestic corporations

A domestic corporation is any company incorporated in Japan. This includes a kabushiki kaisha (KK) and a godo kaisha (GK).

Domestic corporations pay corporate tax on worldwide income. Overseas profit, cross-border service fees and foreign royalties all enter the Japanese tax base.

A sole proprietor pays income tax instead of corporate tax.

Foreign corporations and permanent establishments

Foreign corporations engaged in business in Japan pay corporate tax only on income attributable to Japan. In most cases, Japan taxes that income only when the company has a permanent establishment (PE) here.

Common examples of a permanent establishment:

• A registered branch office

• An office or coworking space used on a continuing basis

• Employees working in Japan

• An agent who regularly concludes contracts for the company in Japan

A representative office that only does market research or liaison work usually creates no taxable profit. Even without a permanent establishment, Japan taxes some income from assets located in Japan, such as rent or real estate sales.

Branch offices vs wholly owned subsidiaries

	Branch office	Wholly owned subsidiary (KK or GK)
Legal entity	Part of the foreign parent	Separate domestic corporation
Tax base	Income attributable to the branch	Worldwide income
Profit sent to the parent	Not dividend income	Dividends, subject to withholding tax before treaty relief
Enterprise tax	Normal rules	From fiscal years beginning April 1, 2026, some subsidiaries of large groups with paid-in capital over ¥200M pay size-based enterprise tax

The choice also changes how transfer pricing applies to fees between the parent and Japan.

Tax treaties and double taxation

Japan has income tax treaties with many countries to avoid international double taxation. A treaty can decide whether a permanent establishment exists and how much profit Japan may tax.

Treaty benefits do not apply automatically. You must file the treaty forms with the tax authorities or the payer in Japan. A domestic corporation that pays tax abroad can usually claim a foreign tax credit against its Japanese corporate tax. See our guide to the US-Japan tax treaty for one example.

Large groups: the global minimum tax

Japan applies the income inclusion rule to groups with revenue of €750 million or more, from fiscal years beginning April 1, 2024. If a group's foreign subsidiary pays under 15%, the Japanese parent pays a top-up tax. Further rules took effect in April 2026.

Who collects the tax

The National Tax Agency collects national tax through local tax offices. It receives returns, issues assessments and runs audits. Prefectures and municipalities collect local taxes and send their own notices.

Corporate tax vs. consumption tax in Japan

Corporate tax is a profit tax. Consumption tax (JCT) is a transaction tax with a standard rate of 10%, similar to VAT or GST.

The two are separate. A loss-making company may owe no corporate tax but still owe consumption tax on its sales.

👉 See our Japanese business glossary for the main tax types in Japan.

How corporate tax is calculated

Japan calculates corporate tax on taxable income for each business year. You start with accounting profit and adjust it under tax rules.

Taxable income

Taxable income = accounting profit + taxable add-backs − tax-deductible items.

Typical adjustments cover expenses that are only partly deductible, timing differences and special deductions.

Deductible expenses

An expense is deductible when you incurred it for the business and can prove it. Common deductible expenses:

• Salaries and bonuses for employees

• Office rent and utilities

• Accounting, legal and consulting fees

• Marketing and advertising

• Travel and entertainment, within set limits

Entertainment above a certain amount, director bonuses and donations face strict limits. Tax reviews often adjust these first.

👉 Salaries also bring withholding duties; see our Japan payroll guide.

Depreciation

You depreciate equipment, computers and machinery over a useful life set by law. You cannot expense them in full in the year of purchase.

Buildings, building fixtures and structures must use the straight-line method. Machinery, equipment and vehicles can use the 200% declining-balance method instead.

Loss carryforwards and the blue return

A company that files a blue return (青色申告) can carry tax losses forward for up to 10 years. Large companies can offset only part of each year's profit. SMEs can usually offset all of it.

You must apply for blue return status in advance and keep proper books. New companies should apply within three months of incorporation, or before the first year ends if sooner. Without it, you lose the loss carryforward.

Related-party transactions

Fees between your Japanese company and a foreign parent must follow transfer pricing rules. This covers management fees, service fees, royalties and cost allocations.

The tax authorities check whether the consideration matches what independent companies would agree. Questions arrive as formal written notices by post.

Example: how much corporate tax a company pays

Take a Tokyo SME with ¥10 million in stated capital and ¥10 million of taxable income. We use standard rates.

Tax	Calculation	Amount
Corporate tax	¥8M × 15% + ¥2M × 23.2%	¥1,664,000
Local corporate tax	¥1,664,000 × 10.3%	¥171,392
Defense special corporate tax	Corporate tax under ¥5M, so nothing due	¥0
Inhabitant tax, corporate levy	¥1,664,000 × 7.0%	¥116,480
Inhabitant tax, per capita levy	Tokyo minimum	¥70,000
Enterprise tax	¥4M × 3.5% + ¥4M × 5.3% + ¥2M × 7.0%	¥492,000
Special corporate enterprise tax	¥492,000 × 37%	¥182,040
Total		¥2,695,912

The total amount is about 27% of taxable income. Real returns round each amount, and you can deduct enterprise tax in the next business year. Actual rates vary by prefecture and municipality.

Budget for these taxes in your cost of starting a business in Japan.

A large company pays about 30% on the same income.

👉 See the National Tax Agency guidelines for more detail.

Corporate tax deadlines in Japan for 2026

You file and pay corporate tax within two months after the applicable fiscal year ends. The due date is the same for the national return and the local returns.

Return	Who files	Due date
Final return	Every corporation	Within two months of the fiscal year-end
Interim return	Companies whose corporate tax for the previous fiscal year exceeded ¥200,000	Within two months after the first six months
Defense special corporate tax return	Every corporation, for fiscal years beginning on or after April 1, 2026	With the final return
Local tax returns (inhabitant and enterprise tax)	Every corporation	Same as the national return, via eLTAX or paper

A company with a December 31 year-end files by February 28 (February 29 in 2028). A date on a weekend moves to the next business day. See our guide to the Japan fiscal year for other year-ends.

The interim return

The interim return is an advance payment on this year's tax. You can pay half of last year's corporate tax, or file a provisional return for the first six months.

The tax office posts the interim form to your registered address. If nobody opens it, the interim payment can go unpaid.

Filing extensions

You can apply in advance for a one-month extension, for example when your shareholders' meeting falls later. The extension covers the return, not the payment.

Interest tax (利子税, rishizei) accrues on tax paid after the original due date. The rate is 1.3% a year in 2026.

Why foreign corporations miss deadlines

• Notices arrive by post. Filing reminders, payment slips and assessment notices go to your registered address in Japan.

• Everything is in Japanese. Overseas teams often delay opening or translating tax mail.

• No one is on the ground. Without local staff, small requests from the tax office go unanswered.

How to file corporate tax returns in Japan

Most companies file through a licensed tax accountant (税理士, zeirishi). You can also file yourself through the National Tax Agency's e-Tax system, and file local returns through eLTAX.

Licensed tax accountant

A tax accountant prepares the national and local returns, calculates the tax and files them for you. Your company still carries legal responsibility for the return.

This is the standard route for companies without Japanese-speaking finance staff. It also suits groups with cross-border transactions.

👉 Need one? See our short list of bilingual accounting firms in Tokyo.

Tax agent

A foreign corporation without an office in Japan may appoint a tax agent (納税管理人, nozei kanrinin). The tax agent receives official mail, such as payment slips and assessment notices.

A tax agent does not file returns for you. Most foreign corporations still need a tax accountant as well.

Electronic filing

Domestic corporations with capital over ¥100 million must file national and local returns electronically. A paper return from one of these companies counts as not filed. Other corporations, including foreign corporations, can choose e-Tax or paper.

Electronic filing covers the return itself. Payment slips, assessments and follow-up questions still arrive by post.

Supporting documents

The final return form comes with schedules and statements:

• Financial statements

• Profit and loss details

• Fixed asset and depreciation schedules

• Loss carryforward schedules

• Shareholder and capital information

• Related-party transaction disclosures, where they apply

The tax office may request more documents after filing. Those requests also arrive as written notices.

Tax mail your company will receive

The tax authorities send most legally binding notices by post, even when you file online. Expect four kinds of letters:

Letter	What it does	What to do
Payment slip	Shows the tax type, amount and due date	Pay at a bank, convenience store or online by the due date
Assessment notice	Confirms or sets your corporate tax liability	Pay, or file an objection within the stated period
Correction notice	Changes a return you filed	Check the change and pay any extra tax quickly
Audit letter	Requests records, contracts or a visit	Reply within the stated deadline, with your tax accountant

A missing payment slip does not move the due date. Audit letters to foreign companies often focus on fees, royalties and profit attributable to Japan.

Pay from a corporate bank account, not a personal one.

What happens if you miss a payment or notice

Japan treats a late payment as a compliance failure, even when it is unintentional. Four things can follow.

Delinquency tax

Delinquency tax (延滞税, entaizei) accrues daily from the day after the due date. In 2026, the rate is 2.8% a year for the first two months and 9.1% a year after that.

Penalty taxes

Separate penalty taxes apply when you file late, fail to file or under-report. They are calculated as a percentage of the tax due.

Forced collection

If you still do not pay after reminders, the tax office can seize bank accounts, receivables and other assets. It does not need a court order.

Higher audit risk

Companies that miss payments or ignore notices are more likely to face audits. Reviews then look closely at deductible expenses, related-party fees and profit attributable to Japan.

How MailMate helps foreign companies manage tax mail

MailMate is your secure virtual mailbox in Japan—built for overseas founders and finance teams who cannot afford to miss tax mail, payment deadlines, or government notices.

Need help with the returns themselves? MailMate also offers bookkeeping and tax filing through licensed partners.

Never miss a tax notice again

MailMate receives your Japanese bills, tax notifications, and official government correspondence on your behalf and instantly scans them into your private online dashboard. You can review everything from anywhere in the world without waiting for international mail.

Manage Japanese tax mail from abroad

All physical Japanese mail, such as refund notices and tax office letters, is digitized and available online, so your team can act immediately, even if you are outside Japan.

Need the original document?

Simply request international forwarding inside your dashboard. MailMate ships it to your chosen address and provides a tracking number.

Built for tax and audit compliance

MailMate supports compliance with Japan’s Electronic Bookkeeping Act by ensuring that:

• tax documents (receipts, invoices, and purchase records) are stored in a tamper-resistant format

• files can be searched by date, document type, and keywords

• records are preserved with time-stamped verification

This makes it easy to retrieve documents during audits, filings, or internal reviews.

Pay taxes and bills on time—every time

The moment your mail arrives, you receive a real-time notification. Each scanned document is clearly labeled with its due date and payment or response requirements, so nothing slips through the cracks.

MailMate turns slow, paper-based Japanese tax mail into a fast, trackable, and compliant digital workflow—so you stay in control, even when your business is managed from overseas.

Corporate tax in Japan: Frequently asked questions

What is the corporate tax rate in Japan?

The national corporate tax rate in Japan is 23.2% of taxable income. Small and medium sized enterprises with stated capital of ¥100 million or less pay 15% on their first ¥8 million.

That rate rises to 17% if annual income exceeds ¥1 billion. Local corporate tax, inhabitant tax and enterprise tax are levied on top.

What is the effective corporate tax rate in Japan in 2026?

Large companies pay an effective rate of about 30%. SMEs pay roughly 21% to 25% on their first ¥8 million and about 33% to 35% above that.

The defense special corporate tax adds about 0.8 to 1.0 points for companies whose corporate tax exceeds ¥5 million. Exact rates vary by prefecture and municipality.

What is the defense special corporate tax in Japan?

The defense special corporate tax (防衛特別法人税) is a new national tax from the 2025 tax reform. It applies to fiscal years beginning on or after April 1, 2026.

The tax is 4% of your corporate tax after a ¥5 million deduction. Every corporation must file the return, even when no tax is due.

When is the corporate tax filing deadline in Japan?

You file and pay within two months after your fiscal year ends. For a December 31 year-end, the due date is February 28. Some companies also file an interim return.

It is due within two months after the first six months if corporate tax for the previous fiscal year exceeded ¥200,000. A filing extension does not extend the payment date.

What happens if I miss a corporate tax deadline in Japan?

Delinquency tax accrues daily from the day after the due date. In 2026, the rate is 2.8% a year for the first two months and 9.1% after that.

Penalty taxes apply to late or missing returns. If you still do not pay, the tax office can seize bank accounts without a court order.

Do I need a Japanese tax accountant to file corporate tax?

No law requires one, but most foreign-owned companies use a licensed tax accountant (税理士, zeirishi). Corporate tax involves national and local returns, Japanese documents and several tax offices.

Your company stays legally responsible for the return, even when an accountant files it.

Does Japan tax foreign companies on worldwide income?

No. Foreign corporations pay Japanese corporate tax only on income attributable to Japan. In most cases, that means income linked to a permanent establishment such as a branch office.

A domestic corporation, including a wholly owned subsidiary, pays tax on worldwide income.

Do loss-making companies pay corporate tax in Japan?

A loss-making company pays no tax on income, but it still pays the per capita inhabitant tax. That levy starts at ¥70,000 a year in the 23 wards of Tokyo and rises with capital and employees.

The company must also file its returns, including the defense special corporate tax return from fiscal years beginning April 1, 2026.

In closing

Corporate tax in Japan is predictable once you know the rates and the calendar. Most companies pay about 21% to 35% depending on size and income. The new defense tax adds a little more from 2026.

Work with a licensed tax accountant and keep clean records of cross-border fees. Above all, monitor your registered address, because every due date arrives by post. Setting up a new company? Read our guide to company incorporation in Japan first.

Sources

• JETRO: Overview of corporate income taxes

• Mie Prefecture: 2026 corporate tax rates and the defense special corporate tax

• Money Forward: 2026 corporate tax rates and the 17% SME tier

• Shizuoka Prefecture: size-based enterprise tax from April 2025

• Tottori Prefecture: size-based enterprise tax for wholly owned subsidiaries from April 2026

• National Tax Agency: delinquency and interest tax rates

• National Tax Agency: depreciation methods

• Okinawa Prefecture: interim return rules

• Ministry of Finance: global minimum tax timeline

• National Tax Agency: blue return application deadline

• Tokyo Metropolitan Tax Office: enterprise tax filing and extensions

• Ayusawa Partners: inhabitant tax per capita levy

• Zeiken: defense special corporate tax filing obligation