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.
2023/01/171 min read

Reorganization has become an indispensable tool for efficient corporate management and business expansion.As one of the methods, the Companies Act provides for a legalframework of business transfer.Business transfers are used to transfer a business to another company in order to improve management efficiency, or to take over another compa ny's business in order to further expand the business.Business transfers may also be used to resolve a company's insolvency.
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This 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.
Starting in 2027, a revised minimum tax regime will apply to certain high-income individuals in Japan. While JPY165 million is used as a calculation threshold, additional tax is only triggered where the minimum tax exceeds the regular income tax liability. The reform is intended to ensure a minimum level of taxation, particularly where a significant portion of income is derived from investment or equity-based sources.
In recent years, international tax authorities have intensified scrutiny of cross-border structures involving low-substance entities, commonly referred to as “paper companies.” Japan is no exception and such structures continue to be examined under existing anti-avoidance frameworks, including the “Controlled Foreign Company (CFC) regime and treaty-based anti-abuse rules.
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