Japan V.A.T. and Other Taxes

Japan Enterprise Tax

This tax is imposed on enterprises that are managed in Japan.
The rates for corporations are 3.5% to 7% (the higher rate is in respect of a corporation with income in excess of 8 million yen).

Japan Consumption Tax

The tax is similar to value added tax and is, in fact, imposed on most sales and services provided in Japan and on imports.
A taxpayer may offset the consumption tax paid on expenses against the tax he has to pay on his income.
Consumption tax is 10%.
For certain products, e.g. food, drinks and certain newspapers the tax rate is 8%.

Income that is exempt from Consumption Tax

  • Export
  • Sale of real estate
  • Foreign currency transactions
  • Interest
  • Sale of stamps
  • Medical services

Japan Inheritance and Gifts Tax

Japan Inheritance Tax

In the case of a Japanese resident, the tax is on all inheritances, including those that have their source overseas.
For foreign residents, the obligation is solely in respect of assets in Japan.
The rates of the tax are between 10% - 55% and they are imposed progressively according to the value of the asset.
Relief - A basic exemption of 10 million yen. An additional exemption of 10 million yen for each heir.

Japan Gift Tax

The gift tax rates are between 10% - 55% and depend on the value of the asset.
It should be pointed out that a gift given to an individual by a corporation is subject to income tax and not to gift tax.
Relief - A basic exemption of 2 million yen.
An additional exemption for a gift from an elderly parent, up to 25 million yens, is given in certain cases.