Business Office Taxation in Japan
JAPAN TAX BULLETINThis article introduces the Business Office Tax, which needs to be considered when entities conduct business in offices or workplaces within cities with a population of 300,000 or more.
Contents
The tax deductibility of officer1 remuneration is limited under Japan tax law (Corporation Tax Law (“CTL”) 34①). Officer remuneration consists of amounts other than retirement payments and are only deductible for corporate income tax purposes if they fall under the following categories:
(1) Salary paid in the same amount on a regular basis2 (CTL 34①(1));
(2) Salary for which the fixed payment amount has been notified in advance (CTL 34①(2)); or
(3) Performance-linked salary3 (CTL 34①(3)).
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