Business taxes in Japan: calculator for sole proprietors and companies
Choose a sector, a legal form and a tax system, enter your annual revenue and expenses — the calculator shows every tax and contribution, the total and what you keep.
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Legal forms
Sole proprietor 個人事業主
You run the business in your own name: there is no separate legal entity and you are liable for business debts with all your assets. Income tax and inhabitant tax are charged on business income, plus the prefectural enterprise tax.
Requirements
Notice of starting a business (個人事業の開業・廃業等届出書) to the tax office by the filing deadline for the year in which you started; free, via e-Tax or on paper.
In Tokyo, also file a business start declaration (事業開始等申告書) with the metropolitan tax office within 15 days of starting.
Blue return (青色申告): apply by 15 March of the year or within 2 months of starting if you started on or after 16 January; the ¥650,000 deduction needs double-entry books and filing via e-Tax.
The annual income tax return is due by 15 March of the next year; it also replaces separate returns for inhabitant tax and enterprise tax.
Consumption tax: you are liable if sales two years earlier exceeded ¥10 million or you are registered as a qualified invoice issuer (インボイス).
Profit minus ¥650,000 is subject to income tax at 5–45% (+2.1%) and 10% inhabitant tax; on top, 5% enterprise tax on profit above ¥2.9 million, National Health Insurance and the National Pension.
Conditions
Blue-return approval is required: apply by 15 March (or within 2 months of starting), keep double-entry books and file via e-Tax (or keep electronic books). Without e-Tax the deduction is ¥550,000.
Consumption tax applies if sales two years earlier exceeded ¥10 million or you register as an invoice issuer; it is not included in the calculation.
A legal entity: members are liable only up to their contribution. 株式会社 (KK) is the standard joint-stock company; 合同会社 (GK) is cheaper to set up and run and is taxed the same way.
Requirements
KK: the articles must be notarised — ¥30,000 with capital under ¥1 million (¥15,000 with up to 3 individual founders and no board), ¥40,000 under ¥3 million, otherwise ¥50,000; paper articles also need a ¥40,000 revenue stamp, electronic ones do not. A GK needs no notarisation.
Registration and licence tax: KK 0.7% of capital, at least ¥150,000; GK 0.7%, at least ¥60,000. There is no minimum share capital.
Notice of incorporation (法人設立届出書) with a copy of the articles to the tax office within 2 months of registration.
The corporate tax return is due within 2 months after the end of the financial year; the interim return within 2 months after the first 6 months.
The company pays corporate tax of 15% up to ¥8 million and 23.2% above, local corporate tax, corporate inhabitant tax and enterprise tax (together roughly 22–38%). The owner declares dividends with other income at progressive rates with the dividend credit and also pays health insurance and the pension.
Conditions
Dividends from an unlisted company cannot be taxed separately at 20.315%: they are declared under aggregate taxation (the 20.42% withheld is credited).
An owner without salary is not in employees' pension and health insurance, so they pay the National Pension and National Health Insurance themselves — even if profit stays in the company.
The flat inhabitant tax of ¥70,000 is due even with a loss. Consumption tax as for sole proprietors (not included); a new company with capital under ¥10 million is usually exempt for 2 years unless it registers for invoices.
Software development, IT services, consulting for companies and entrepreneurs.
Enterprise tax (個人事業税): consulting (コンサルタント業, type 3) and contract work (請負業, type 1) — 5% of profit above ¥2.9 million; whether a specific software development activity is on the list of 70 businesses is decided by the prefectural tax office.
Simplified consumption tax (簡易課税: sales two years earlier ≤ ¥50 million, election before the period starts): input tax is deemed to be 50% of output tax (type 5 — services).
Business clients usually require qualified invoices; registering as an invoice issuer makes you liable to consumption tax regardless of turnover (No.6498, No.6501). Consumption tax is not included in the calculation.
Other business services draft — data being checked
Marketing, design, translation, engineering, bookkeeping and other professional services to companies.
Enterprise tax 5%: advertising (広告業), design (デザイン業), design supervision (設計監督者業) and accounting (計理士業) are on the list; activities outside the 70 listed businesses (e.g. writing) are not taxed — whether translation is covered is decided by the tax office.
Simplified consumption tax (簡易課税: sales two years earlier ≤ ¥50 million, election before the period starts): input tax is deemed to be 50% of output tax (type 5 — services).
Business clients usually require qualified invoices; registering as an invoice issuer makes you liable to consumption tax regardless of turnover (No.6498, No.6501). Consumption tax is not included in the calculation.
Services to individuals draft — data being checked
Household services, repairs, beauty, tutoring, photography — for private customers.
Enterprise tax: barbers (理容業), beauty salons (美容業), dry cleaning (クリーニング業), photography (写真業) — 5%; massage, acupuncture, judo therapy (あんま・マッサージ・はり・きゅう・柔道整復) — 3%; activities not on the list are not taxed.
Simplified consumption tax (簡易課税: sales two years earlier ≤ ¥50 million, election before the period starts): input tax is deemed to be 50% of output tax (type 5 — services; restaurants are type 4, 60%).
Private customers do not need invoices: with sales two years earlier of ¥10 million or less and no invoice registration, no consumption tax is due (No.6501).
Food service needs a business permit from the public health centre (保健所) under the Food Sanitation Act and HACCP-based hygiene control.
Trade in goods draft — data being checked
Retail and wholesale, including an online shop (excluding excise goods).
Enterprise tax: sale of goods (物品販売業, type 1) — 5% of profit above ¥2.9 million.
Simplified consumption tax (簡易課税: sales two years earlier ≤ ¥50 million, election before the period starts): input tax is deemed to be 80% of output tax (type 2 — retail; wholesale is type 1, 90%).
Food (excluding alcohol and eating out) is taxed at the reduced 8% rate instead of 10%; a temporary 2-year cut of the food rate from 1 April 2027 has been announced (bill).
An online shop must show, under the Act on Specified Commercial Transactions, the price including shipping, payment and delivery terms, return conditions, and the seller's name, address and phone number.
Manufacturing draft — data being checked
Making and selling your own products: food, furniture, clothing, handmade goods.
Enterprise tax: manufacturing (製造業, type 1) — 5% of profit above ¥2.9 million.
Simplified consumption tax (簡易課税: sales two years earlier ≤ ¥50 million, election before the period starts): input tax is deemed to be 70% of output tax (type 3 — manufacturing).
Food production needs a business permit or notification at the public health centre (保健所) and HACCP-based hygiene control (Food Sanitation Act).
Food (excluding alcohol and eating out) is taxed at the reduced 8% rate instead of 10%; a temporary 2-year cut of the food rate from 1 April 2027 has been announced (bill).
Assumptions
One owner, resident of Japan, under 40 (no long-term care premium), no employees, no other income, no children, full year 2026; Tokyo, 23 special wards.
Inhabitant tax and health insurance at 2026 rates are applied to 2026 income (in practice they are paid the following year on this year's income). Prior-year enterprise and local taxes are not deducted as expenses.
For the company: capital up to ¥10 million, financial year = calendar 2026, the owner takes no salary; profit after tax is either paid out in full as dividends or kept in the company.
Not included: consumption tax, the ¥1,000 forest environment tax, the defence special corporate tax (financial years from 1 Apr 2026; not yet applicable with a calendar-2026 financial year).
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