Overview

Income tax (所得税) is a national tax levied on income earned by individuals during the calendar year (January 1 to December 31). The Income Tax Act (所得税法) classifies income into 10 categories — including employment income (給与所得), business income (事業所得), real estate income (不動産所得), and capital gains (譲渡所得) — each with its own calculation method. Sole proprietors (個人事業主) primarily file for business income. Tax rates follow a progressive bracket system ranging from 5% to 45% across 7 brackets, with higher income subject to higher rates. In addition to income tax, a special reconstruction surtax (復興特別所得税) of 2.1% of the income tax amount applies through 2037. Various income deductions (所得控除) — such as the basic deduction (基礎控除), spouse deduction (配偶者控除), and social insurance premium deduction (社会保険料控除) — reduce taxable income before the final tax is calculated.

Key things to know

• Income is classified into 10 types; business income (事業所得) is subject to aggregate taxation (総合課税) • Tax rates range from 5% to 45% across 7 progressive brackets (超過累進税率) • Blue return filing (青色申告) provides a special deduction of up to ¥650,000 and other tax benefits • The statutory filing period is February 16 to March 15 (shifts to the next business day when dates fall on weekends or holidays) • Income deductions (所得控除) include the basic deduction (基礎控除, ¥480,000), social insurance premiums (社会保険料控除), and small business mutual aid contributions (小規模企業共済等掛金控除) • Estimated tax payments (予定納税) are required twice a year if prior year tax exceeded ¥150,000 • The special reconstruction surtax (復興特別所得税) of 2.1% applies through 2037

Related dates