Japanese Income tax vs Corporate Tax for Property Owners

Japanese income tax calculator assessment tool for property owners

Japanese income tax can be sometimes confusing and difficult to understand. This tax calculator is used to assess what amount is the “crossover point” where it’s more beneficial to classify income from investment property as “personal” or “corporate” in order to minimise the Japan tax payable. This important when deciding whether you should hold the Japanese property under an individual name or via a corporate structure.

62 million yen

Building Cost

10 million yen

Land Cost

9 million yen

Annual Income

5 million yen

Annual Expense

Personal Corporate
Income ¥9,000,000 ¥9,000,000
Expenses ¥450,000 ¥450,000
Gross profit ¥8,550,000 ¥8,550,000
Depreciation ¥2,066,667 ¥2,066,667
Income before Tax ¥6,483,333 ¥6,483,333
Blue tax deduction ¥100,000
Standard Deduction ¥380,000
Taxable income ¥6,003,333 ¥6,483,333
Tax payable ¥773,167 ¥1,015,290
Effective Tax rate 11.93 15.7
Graphically represented you can easily visualise at what point its better to structure your property holdings under a corporate structure rather than individually or joint owned, this decision made early on in the process can help you minimise your Japanese income tax.
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Other Japan Tax Calculators

Consumption Tax Rebate Calculator (for Japanese property owners)
Historical Tax and Depreciation Calculator (for Japanese property owners)
Income Tax Calculator (for individuals)

For more detailed information visit our Japan Income tax guides.  Alternatively, you can visit the Japanese Taxation office website for the latest up to date information.

The above Japanese income tax calculator are for informational purposes only. Any advice in this communication is not intended or written by us to be used, and cannot be used, for the purpose of (i) avoiding penalties that may be imposed by any governmental taxing authority or agency, or (ii) promoting, marketing or recommending to another party any matters addressed herein.The opinions and analyses expressed herein are subject to change at any time and are based on current market conditions. Any suggestions contained herein are general, and do not take into account an individual’s or entity’s specific circumstances or applicable governing law, which may vary from jurisdiction to jurisdiction and be subject to change.

No warranty or representation, express or implied, is made by SMEJapan, nor does SMEJapan accept any liability with respect to the information and data set forth herein.