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.
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The size-based business taxation system was introduced in 2004.
The size-based business taxation system imposes “a value-added tax” and “a capital-based tax” on companies with stated capital of more than JPY100 million. The taxes are levied even where a corporation is in currently loss position. A value-added tax is levied based on the sum of the distribution of earnings (comprising remuneration and salaries, net interest paid and net rent paid) and profit or loss for a single year, and a capital tax is levied based on the amount of stated capital, capital reserve, other capital surplus etc. as defined by the Corporation Tax Law.
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