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Japan: Amended business tax rates for Tokyo are passed

Japan: Amended business tax rates for Tokyo are passed

A proposal to amend the Tokyo business tax rates, applicable for fiscal years beginning on or after 1 October 2019, was passed by the Tokyo Metropolitan Assembly on 19 June 2019.


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Under Japan's 2019 tax reform, effective 1 October 2019, a part of the business tax is being separated out from the total business tax, and a new national tax (the "special business tax") is being provided as a permanent measure to address gaps in local tax revenue (collected by local governments), with the effect that the special business tax revenue is shared by the Japanese national government with local governments. As a result, the business tax rates applicable for fiscal years beginning on or after 1 October 2019 have been amended.

In general, there are increased tax rates for businesses in Tokyo. However, because the amendment to the tax rates is to improve gaps in local tax revenue collection of local governments, the changes would have little impact on the overall effective corporate tax rates.

Read a June 2019 report prepared by the KPMG member firm in Japan

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