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The following progressive tax is applied to net individual income minus allowable deductions.

1.National income tax

Taxable income (JPY)

Tax rate

Deduction (JPY)
From

Less than

1,950,000

5%

1,950,000

3,300,000 10%

97,500

3,300,000 6,950,000 20%

427,500

6,950,000 9,000,000 23%

636,000

9,000,000 18,000,000 33%

1,536,000

18,000,000 40,000,000 40%

2,796,000

40,000,000

45%

4,796,000

 

2. Inhabitant tax

Inhabitant tax consists of two elements as below;

  • Per capita levy – A small levy imposed regardless of the amount of income. Normally, municipal inhabitant tax is 3,000 yen and prefectural inhabitant tax is 1,000 yen.
  • Income based levy – A more significant tax based upon the taxable income of the individual taxpayer in Japan. The tax rate is 10 percent of amount of taxable income.