Do loss-making corporations in Japan still pay taxes?

Yes. While income-based taxes drop to zero, corporations must pay the mandatory municipal Per Capita Levy (Kintowari), starting from 70,000 JPY per year regardless of profit.

Why is the effective tax rate lower than the nominal tax rate sum?

Because Japanese Enterprise Tax paid in the current tax year is legally deductible as an expense against the subsequent year's taxable income, lowering effective tax to ~30%.

JapanUpdated for 2026Finance

Japan Corporate Effective Tax Rate Calculator 2026

Calculate corporate national tax, local corporate tax, enterprise tax, and inhabitant taxes for businesses in Japan, modeling the standard 15%-23.2% SME brackets and ~30% effective rate.

Income Tax & Brackets Break-Even Point Profit Margins & Pricing

Calculated Result

Total Corporate Taxes Due

¥3,226,144

Net Profit After Corporate Taxes

¥8,773,856

Calculator Inputs

Taxable Corporate Profit

Quick select:

Corporate Capital Size

Total Corporate Taxes Due

¥3,226,144

Net Profit After Corporate Taxes

¥8,773,856

Effective Tax Rate

26.88%

National Corporation Tax

¥2,128,000

Local Corporation Tax

¥219,184

Corporate Inhabitant Tax

¥148,960

Corporate Enterprise Tax

¥660,000

Taxes Paid vs Net Profit

Total Corporate Taxes Due

¥3,226,144(27%)

Retained Earnings Balance

¥8,773,856(73%)

Based on standard municipal and national tax rates for corporations with capital under 100M JPY. Excludes size-based business taxation (Gaikei Hyojun).

This calculator is a mathematical model for general financial estimation, planning, and educational guidance. Results depend on your inputs and standard formulas, and do not constitute binding financial, tax, or investment advice. Always consult a qualified professional before making financial decisions.

Official Statute: 法人税法第66条 (各事業年度の所得に対する法人税率) 及び地方税法 (法人事業税・法人住民税の標準税率)Last Verified: 2026-09-03

Calculation Methodology

Total Taxes = Corporation Tax (15% up to 8M / 23.2% above) + Local Corporate Tax + Inhabitant Tax + Enterprise Tax + Per Capita Flat Fee (70,000 JPY)

Frequently Asked Questions

SMEs with capital under 100 million JPY enjoy a reduced 15.0% national corporate tax rate on annual taxable income up to 8 million JPY (compared to standard 23.2%).