What are the types of taxes in Japan?

Jul 12, 2016


There are 6 relevant types of taxes paid by individuals

If you must know, taxes in Japan are paid on income, property and consumption on the national, prefectural and municipal levels. These are the following breakdowns on the income taxes in Japan


1. Income tax

Income tax is paid annually by individuals on the national, prefectural and municipal levels. Income tax on the prefectural and municipal levels is called as resident tax.

The amount of tax is calculated based on the net income of the individual person.

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2. Enterprise tax

The Enterprise tax is paid annually by self-employed individuals engaged in business activities, such as prefectural tax.

The amount of tax is calculated based on the person’s net income and the type of business.

3. Property tax

The Property tax is paid annually by individuals who have land, housing and other types of

depreciable assets, as municipal tax.

4. Consumption tax

Consumption tax is paid by consumers when they purchase goods and services.

The rate is currently eight percent at present.

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5. Vehicle related taxes

There are 3 different types of vehicle related taxes.

1) An automobile tax is paid annually by individuals who own a car, truck or bus, as prefectural tax.

The amount of tax is calculated based on the engine displacement, in case of passenger cars.

2) A vehicle tonnage tax is paid by vehicle owners at the time of the mandatory inspections (shaken), as national tax.

3) An automobile acquisition tax is paid by persons when they acquire a car, as prefectural tax.

A light vehicle tax is paid annually by individuals who own motorbikes or other motorized light vehicles, as municipal tax.

6. Liquor, tobacco and gasoline taxes

The liquor tax is paid by consumers when they purchase alcoholic beverages, as national tax.

The tobacco taxes are paid by consumers when they purchase tobacco products, as national, prefectural and municipal taxes.

A gasoline tax is paid by consumers when they purchase gasoline, as national tax.

The taxes of liquor, tobacco and gasoline are included in the prices shown by shops.

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