Corporate Effective Tax Rate（実効税率）in Tokyo

The current effective tax rates of a corporation located in the Tokyo Special 23 Wards for a fiscal year that has begun or will begin before October 1, 2019 are as below.

If you are interested in how they are calculated, please refer to “Effective Tax Rate In Japan – How It Is Calculated” and also to the chapter in this blog “How the rates of metropolitan inhabitant tax and business tax are determined by the Tokyo Metropolitan Government”.

1.     Effective tax rates in Tokyo by conditions

①    30.6% for a corporation whose

　　　　capital amount is over 100 million yen

②    34.6% for a corporation whose

　　　　capital amount is up to 100 million yen, and

 　　amount of current year’s corporation tax is over 10 million yen, and

　　 amount of current year’s taxable income is over 25 million yen

③    34.3% for a corporation whose

 　　capital amount is up to 100 million yen, and

  amount of current year’s corporation tax is over 10 million yen, and

  amount of current year’s taxable income is up to 25 million yen

④    33.9% for a corporation whose

　　　　capital amount is up to 100 million yen, and

　　　　amount of current year’s corporation tax is up to 10 million yen, and

　　　　amount of current year’s taxable income is over 25 million yen

⑤    33.6% for a corporation whose

　　　　capital amount is up to 100 million yen, and

　　　　amount of current year’s corporation tax is up to 10 million yen, and

　　　　amount of current year’s taxable income is up to 25 million yen

2.    How the rates of metropolitan inhabitant tax and business tax are determined by the Tokyo Metropolitan Government

①    Metropolitan inhabitant tax

       The local inhabitant tax imposed by the Tokyo Metropolitan Government is called “metropolitan inhabitant tax”. It is equal to prefectural inhabitant tax as the Metropolis of Tokyo is one of the prefectures in Japan. However, when a corporation is located in the Tokyo Special 23 Wards, municipal inhabitant tax is also levied by the Tokyo Metropolitan Government in the name of metropolitan inhabitant tax.

   Metropolitan inhabitant tax rates for a corporation located in the Tokyo Special 23 Wards are:

12.9 % for a corporation whose

　capital amount is up to 100 million yen, and

　amount of current year’s corporation tax is up to 10 million yen

16.3 % for a corporation that doesn’t meet the above condition

②    Business tax 

7.18%(6.7%) for a corporation whose

    　　　　　　 capital amount is up to 100 million yen

0.88%           for a corporation whose

    　　　　　　 capital amount is over 100 million yen

　note1: the rate bracketed "()" is only applied for a corporation whose

　　　　　　　　　amount of current year’s taxable income is up to 25 million yen.

　note2: if certain conditions are fulfilled, lower tax rates for the portion of taxable income up to 4 million yen and for another of that 

                over 4 million yen and up to 8 million yen are applied.

(Note: This blog is written on July 23, 2019 based on the information available then.)

written by YAMAMOTO CPA OFFICE  https://www.accounting-solutions-japan.tokyo/en-home