Tax Around the World: Japan February 24, 2006
Today’s series on Tax Around the World features Japan, the second largest economy in the world after USA. Taxation of an individual’s income in Japan is progressive. The tax rate for an individual in 2005 was between 10% - 37%, and is proposed to be between 10% - 40% in 2006.
The following table shows Japan individual income tax rates for 2005:
2005 Japan National Tax Brackets
| Tax Base (Yen) | Tax |
| 1 - 3,300,000 | 10% |
| 3,300,001 - 9,000,000 | 20% of base exceeding 3,300,001 |
| 9,000,001 - 18,000,000 | 30% of base exceeding 9,000,001 |
| 18,000,001 and over | 37% of base exceeding 18,000,001 |
For 2006, the national individual income tax rate will be changed as below. The income tax bands would increase from four currently to six.
2006 Japan National Tax Brackets
| Tax Base (Yen) | Tax |
| 1 - 1,950,000 (US$ 16,685.21) |
5% |
| 1,950,001 - 3,300,000 (US$ 28,236.50) |
10% of base exceeding 1,950,001 |
| 3,300,001 - 6,950,000 (US$ 59,467.78) |
20% of base exceeding 3,300,001 |
| 6,950,001 - 9,000,000 (US$ 77,008.64) |
23% of base exceeding 6,950,001 |
| 9,000,001 - 18,000,000 (US$ 154,017.28) |
33% of base exceeding 9,000,001 |
| 18,000,001 and over | 40% of base exceeding 18,000,001 |
(n.b.: as of 2/23/06, 1 USD = 116.87 Yen)
Source:
KPMG Tax Corporation (pdf file)