Japan
Top Income Tax
45%
Marginal rate
Corporate Tax
30.62%
Standard rate
VAT / Sales Tax
10%
Standard rate
Capital Gains
20.315%
Standard rate
Overview
Japan has one of the world's highest tax burdens with an effective top rate exceeding 55% when all taxes are combined. However, the country offers exceptional quality of life, safety, and infrastructure. Tokyo is a major global financial center with a growing startup ecosystem.
Income Tax Brackets
| Income Range (JPY) | Tax Rate |
|---|---|
| 0 - 1,950,000 | 5% |
| 1,950,000 - 3,300,000 | 10% |
| 3,300,000 - 6,950,000 | 20% |
| 6,950,000 - 9,000,000 | 23% |
| 9,000,000 - 18,000,000 | 33% |
| 18,000,000 - 40,000,000 | 40% |
| 40,000,000+ | 45% |
Plus 2.1% reconstruction surcharge and 10% resident tax. Effective top rate ~55%.
Corporate Tax
Standard Rate
30.62%
Effective rate including national, local, and enterprise taxes. Can be lower for SMEs.
VAT / Sales Tax
Standard Rate
10%
Reduced Rates
8%
8% on food and non-alcoholic beverages (except restaurant/takeout dining).
Capital Gains Tax
Standard Rate
20.315%
20.315% flat rate on financial gains (15.315% national + 5% local).
Social Security Contributions
Employee
15%
Employer
15%
Self-Employed
30%
Covers pension, health, employment insurance. Split equally employer/employee.
Digital Nomad Visa
Digital Nomad Visa launched 2024. Up to 6 months. Must earn over 10M JPY/year. Must be from visa-exempt country.
Pros & Cons
Pros
- Exceptional safety and quality of life
- World-class infrastructure
- Strong consumer market
- Rich cultural experience
- Digital nomad visa (new)
Cons
- Very high effective tax rate (55%+)
- Complex tax system
- High corporate tax
- Language barrier
- Aging population
Living Indicators
Cost of Living Index
Above average
Quality of Life Index
Good
Best For
Data Sources
Tax rate data for Japan is compiled from the following authoritative sources:
- OECD Tax Database
- Tax Foundation International Tax Competitiveness Index
- World Bank Business Enabling Environment
- Japan government tax authority publications
- PwC Worldwide Tax Summaries
Last verified: 2024-01
Disclaimer: This content is for informational purposes only and does not constitute tax advice. Tax laws change frequently. Always consult a qualified tax professional before making decisions about your tax residency or obligations.