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GUIDE · CORPORATE TAX

Corporate tax rates in Japan

法人税の税率National corporate tax for small companies

A small company in Japan pays a lower national rate on its first ¥8 million of income each year. Local taxes come on top.

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Updated October 26, 2026 · Checked against the official site by our editors

Up to ¥8M

15%

Of yearly income

Above ¥8M

23.2%

For small companies

Small means

≤ ¥100M

Capital, with exceptions

Plus

Local taxes

Inhabitant and enterprise tax

The rates

CompanyIncome up to ¥8M a yearIncome above ¥8M
Capital ¥100 million or less15%23.2%
Other ordinary companies23.2%23.2%

Rates for business years starting on or after April 1, 2025. In a year when income exceeds ¥1 billion, the lower band becomes 17%.

Who does not get the small-company rate

  • Companies 100% owned by a large company (capital of ¥500 million or more) — even if their own capital is small
  • Companies with very high recent income (“excluded businesses”, 適用除外事業者) pay 19% instead of 15% on the lower band

If your Japanese company is a subsidiary of a large overseas group, check this with a tax accountant.

Local taxes on top

National corporate tax is only part of the bill. You also pay local inhabitant tax and enterprise tax, including a per-capita levy charged even at a loss — see Local corporate taxes. For the filings a new company makes, see Taxes for a new company.

FAQ

What is the corporate tax rate in Japan for small companies?

For companies with capital of ¥100 million or less, 15% on the first ¥8 million of income each year and 23.2% above that, before local taxes.

Does a subsidiary of a foreign company get the small-company rate?

Not if it is 100% owned by a company with capital of ¥500 million or more, even if its own capital is small.

Is 23.2% the total tax rate on company profits in Japan?

No. It is the national corporate tax only. Local inhabitant tax and enterprise tax are added on top.

Sources

This page is a plain-English summary, not legal advice. The official Japanese guidelines always take priority.

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