GUIDE · LOCAL TAX
Local corporate taxes in Japan
法人住民税・法人事業税Including the per-capita levy you pay even at a loss
Many founders are surprised by a tax bill in a loss-making first year. That is usually the local per-capita levy, which depends on your capital and staff, not on profit.
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Per-capita levy
Every year
Even with a loss
Based on
Capital
And number of employees
Filed with
Prefecture
And city (Tokyo: the metro gov’t)
Big capital
Higher
Larger capital, higher bracket
The local taxes on a company
| Tax | Japanese | Based on |
|---|---|---|
| Corporate inhabitant tax — per-capita levy | 法人住民税 均等割 | Capital and number of employees — charged even when there is no profit |
| Corporate inhabitant tax — income levy | 法人住民税 法人税割 | National corporate tax amount |
| Enterprise tax | 法人事業税 | Mainly income for small companies |
In Tokyo’s 23 wards, the metropolitan government collects both the prefectural and city parts. Rates and brackets differ by local government.
Why capital matters
The per-capita levy rises with your “capital amount” bracket. With the ¥30 million Business Manager capital rule, many foreign-owned companies sit in a higher bracket than a typical small startup — budget for it from year one. Check your local government’s rate table.
FAQ
Do I pay tax in Japan if my company makes a loss?
Usually yes — the per-capita levy of the local corporate inhabitant tax, which depends on capital and number of employees rather than profit.
What decides the per-capita levy amount?
The company’s capital amount bracket and number of employees, using each local government’s rate table.
Who collects local corporate tax in Tokyo?
In Tokyo’s 23 wards, the Tokyo Metropolitan Government collects both the prefectural and city portions.
Sources
- Corporate enterprise tax and inhabitant tax — Tokyo Metropolitan Government Bureau of Taxation
- Capital amount for the per-capita levy — checkpoints — Tokyo Bureau of Taxation
This page is a plain-English summary, not legal advice. The official Japanese guidelines always take priority.
NEED HELP IN ENGLISH?
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Zeirishi who handle local and national corporate taxes for foreign-owned companies — in English.
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USEFUL TOOLS
- Zeirishi.com — find a tax accountant (free enquiry) ↗Japanese-language service
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