Individual enterprise tax
Covered business categories, the business-owner allowance, rates, and local administration.
Individual enterprise tax is a prefectural tax on designated business classes; it applies after a business-owner allowance of about ¥2.9M per full year at rates commonly 3%, 4%, or 5%, and the income-tax blue-return special deduction is not deductible when computing it.
Effective: 2026-01-01 to 2026-12-31
Professional review pending — treat as draft and confirm with the authorities.
Key points
- A prefectural tax on legally designated business categories.
- Business-owner allowance: about ¥2.9M per full year.
- Rates are commonly 3%, 4%, or 5% by activity.
- The blue-return special deduction does not reduce enterprise tax.
Who owes it
Enterprise tax applies only to designated business classes — many trades and professions are listed, but some activities fall outside. It is assessed after deducting the business-owner allowance (generally ¥2.9M for a full year), so small businesses below that pay nothing. The prefecture administers it and typically bills in August and November; you do not usually file separately because it flows from your income-tax return data.
How it is computed
The base is broadly your business income with the enterprise-tax rules — importantly, the income-tax blue-return special deduction is added back, so it does not reduce the enterprise-tax base. Rates are commonly 3%, 4%, or 5% depending on the statutory activity. Because categories and reliefs vary by prefecture, confirm your classification locally.
Who this is for
- Sole proprietors above the allowance
- Freelancers budgeting all taxes
What this is not
- Exact prefecture categories and reliefs
- Whether your activity is a taxable class varies by prefecture; confirm locally.
Frequently asked questions
Do I need to file a tax return in Japan?
Many employees do not, because tax is settled by year-end adjustment (年末調整). You generally must file (確定申告) if you have side income over ¥200,000, two or more employers, self-employment income, sizeable investment or crypto gains, or you want to claim deductions like large medical costs or a first-year mortgage credit. Filing season is Feb 16 – Mar 15 via e-Tax. When unsure, check the NTA guidance or ask a 税理士.