Japan Tax Rates 2026

Japan Personal Income Tax Rates for 2026

Japan applies progressive national income-tax rates from 5% to 45% to ordinary taxable income. The same seven national rate bands continue to apply in 2026.

Taxable income is calculated after applying applicable deductions, allowances and special rules. The 2025 tax reforms changed basic and employment-income deductions, so the effective tax burden can differ materially from the headline marginal rate.

Tax Residence and Scope of Taxation

For Japanese income-tax purposes, an individual is generally classified as a resident or non-resident. Residents are further divided into permanent residents and non-permanent residents for the taxation of foreign-source income.

A non-resident is generally an individual who does not have a domicile in Japan and has not maintained a residence in Japan continuously for one year. Non-residents are generally taxed on Japanese-source income, subject to domestic law and applicable tax treaties.

A non-permanent resident is generally a resident of non-Japanese nationality who has had a domicile or residence in Japan for an aggregate period of five years or less during the preceding ten years. The taxation of foreign-source income depends on the statutory source and remittance rules.

Japan Prefectural and Municipal Resident Tax

Local inhabitant tax is imposed separately from national income tax. A typical combined income-based resident-tax rate is approximately 10%, historically comprising prefectural and municipal components, although local rules and fixed per-capita levies also apply.

Resident tax is generally assessed based on the taxpayer's income for the preceding calendar year and collected through salary withholding or direct payment according to local procedures.

Individual Enterprise Tax

Self-employed individuals carrying on specified businesses may also be subject to prefectural individual enterprise tax, commonly at rates in the range of 3% to 5% depending on the type of business and applicable deductions.

Japan Corporate Income Tax Rates for 2026

The standard national corporate income-tax rate for an ordinary corporation is 23.2%. Qualifying small and medium-sized corporations may use a reduced 15% national rate on the first JPY 8 million of annual taxable income, subject to statutory eligibility and exclusion rules.

Companies may also bear local corporate inhabitant tax, enterprise tax and special corporate enterprise tax. As a result, the combined effective corporate tax rate is higher than the 23.2% national headline rate and varies according to company size, taxable income and location.

Defense Special Corporate Tax from 1 April 2026

A new Defense Special Corporate Tax applies to fiscal years beginning on or after 1 April 2026. The tax is generally calculated at 4% of the prescribed corporate-tax amount after a basic deduction of JPY 5 million from the tax base. This deduction means many smaller corporations will not incur the new levy.

Japan Consumption Tax Rates

Japan's consumption tax is imposed at a standard combined national and local rate of 10%. A reduced rate of 8% applies to qualifying food and drink other than alcoholic beverages and dining-out services, and to qualifying subscription newspapers.

Japan's qualified invoice system remains relevant for input-tax credits. Businesses must meet registration, invoicing and record-keeping requirements where applicable.

Japan Withholding Tax / Tax Deducted at Source

Japan operates extensive withholding-at-source rules for salaries, professional fees, interest, dividends, royalties and payments to non-residents. Applicable tax treaties can reduce or eliminate Japanese withholding where treaty requirements are satisfied.

The rates above incorporate Special Income Tax for Reconstruction where applicable. Treaty rates can be lower, and treaty-relief procedures may need to be completed before payment.

Capital Gains and Investment Income

Japan does not use one single capital-gains rate for all assets. Listed securities, unlisted securities, real estate and business assets are subject to different rules. For individuals, gains on listed shares and similar securities are generally subject to separate taxation, and qualifying listed-stock dividends and gains are commonly subject to an aggregate tax burden of about 20.315%, including national and local components.

Real-estate gains are generally taxed separately, with rates depending in part on the holding period. Corporate gains are ordinarily included in taxable corporate income rather than taxed under a separate general capital-gains regime.

Japan Income Tax Filing and Payment Deadlines

Japan's individual tax year follows the calendar year. For income earned during 2025, the 2026 filing period for national income tax and Special Income Tax for Reconstruction ran from 16 February 2026 through 16 March 2026.

Most salary earners whose income is fully handled through Japanese payroll withholding and year-end adjustment do not need to file a separate return, but filing can be required in situations such as high salary income, multiple employers, substantial side income or other taxable income not fully settled through withholding.

Returns may be submitted electronically using Japan's e-Tax system. Special departure-return rules can apply when an individual leaves Japan without appointing a tax agent.

Other Important Taxes in Japan

Property tax: municipal fixed-asset tax generally applies to land, buildings and certain depreciable business assets. Local city-planning tax may also apply.

Vehicle-related taxes: automobile tax, light motor vehicle tax, motor vehicle tonnage tax and other charges can apply depending on the vehicle and registration circumstances.

Liquor, tobacco and fuel taxes: Japan also imposes specific national and local excise taxes. Separate tax reforms affect tobacco taxation from 2026 onward.

Official Japan Tax Resources

• National Tax Agency Japan - English tax information
• National Tax Agency - Individual income-tax rates
• National Tax Agency - Corporate income-tax rates
• National Tax Agency - Consumption tax rates
• National Tax Agency - Final tax returns
• National Tax Agency - Withholding on payments to non-residents
• Ministry of Finance Japan - Corporate taxation
• Ministry of Finance - Defense Special Corporate Tax