NTA Income Tax Brackets in Japan 2024-2025

There are several categories of tax in Japan, including individual income tax, corporation income tax, withholding tax, and international tax. Additionally, there are several indirect taxes such as consumption tax and international tourist tax. 

The official tax body charged with administering the taxation system in Japan is the National Tax Agency (Kokuzeicho) (NTA). The NTA provides detailed information for how a final return needs to be filed and the supporting documentation that should be presented alongside.

The Income Tax Act provides guidance and support in the form of income tax tables for individuals and businesses. Taxpayers must familiarize themselves with these 2024 tax brackets and tax rates, for effective tax planning and to remain compliant with Japanese tax laws.

Here you will learn about:

• headline tax rates
• personal income tax (PIT) rates
• corporate income tax (CIT) rates 
• capital gains tax (CGT) rates for individuals and corporations
• withholding tax rates for residents and non-residents
• sales and consumption tax rates

Headline Tax Rates in Japan

Personal Income Tax (PIT) Brackets in Japan 2024-2025

There are specific tax and filing requirements that must be complied with for an individual who: 

• leaves Japan
• receives lump sum withdrawal payments
• received foreign tax credits as a resident or non-resident
• is a wage earner
• is on a working holiday visa

Permanent residents are taxed on their worldwide income while non-residents are taxed only on Japan-sourced income.

A surtax of 2.1% is charged on an individual's assessed national income tax. 

A non-resident taxpayer’s Japan-source employment income is subject to a flat 20.42% national income tax on gross income with no deductions available. This rate includes 2.1% of the surtax.

Personal Income Tax Due Dates

Corporate Income Tax (CIT) Rates in Japan 2024-2025

The taxes levied in Japan on income generated by corporations include:

• corporate tax
• local corporate tax
• corporate inhabitant tax
• enterprise tax
• special corporate enterprise tax

National Local Corporate Tax Rate

The current national local corporate tax is a fixed rate of 10.3% of the corporate tax liability.

Special Corporate Business Tax Rates (Enterprise Tax)

While the special corporate business tax is a national tax in Japan, it is collected through the enterprise tax return. Enterprise tax is calculated differently depending on the capital base of the taxpayer as tabulated below:

Corporate Inhabitants’ Tax Rates 

Japan imposes inhabitants’ tax on a corporation’s income, allocated to each prefecture and municipality. 

Effective Statutory Tax Rate

The total corporate income tax burden or the effective tax rate in Japan varies depending on the size of a company’s paid-in capital. Since enterprise tax is deductible, the effective tax rate is calculated after deducting the enterprise tax. The effective tax rate is less than the total of the statutory rates of national and local corporate tax, enterprise tax and inhabitants tax.

Corporate Income Tax Due Dates

Capital Gains Tax (CGT) in Japan

Individuals

An individual taxpayer may be required to pay capital gains tax (CGT) on gains arising from the sale of real property and securities such as shares, equity interest in corporations and warrant bonds. Capital gains are typically aggregated with other income and may allow for certain deductions except for gains from the sale of property and certain securities which are taxed separately.

Corporations

In general, a corporate taxpayer does not have to differentiate between different types of income. Capital gains are classified as ordinary income. In certain circumstances, taxes on capital gains may be deferred but these will need certain requirements to be met.

Withholding Tax Rates for Residents and Non-Residents in Japan

In general, withholding tax (WHT) may apply to resident corporations, resident individuals, foreign corporations and non-resident individuals. Rates may vary for these different categories of taxpayer also based on whether WHT applies to dividends, interest or royalties.

Additionally, as Japan has entered into 84 tax conventions with different countries which cover a total of 152 jurisdictions, a taxpayer may benefit from these tax conventions.

Sales and Consumption Tax Rates in Japan

The reduced consumption tax rate of 8% applies to sales of food and beverages, except for alcoholic drinks and dining out, and sales of newspapers published more than twice a week (under subscription contracts).