Under Japanese tax code, small-medium sized businesses are defined as “companies with equity of 100 million yen or under”. Under this definition 99% of all companies in Japan are considered small-medium sized.
Small-medium sized businesses in Japan receive various preferential tax incentives.
| Normal Corporation Small-medium Business | Small-medium Business | ||
| Corporate Tax Rate | 26% | 25.5% tax on profits over 8 million yen | 15% tax on profits under 8 million yen |
| Tax Effect of Entertainment Expenses | Full amount non-deductible | A fixed amount is deductible | |
| Losses carried forward | 9 year carry-forward period 80% of profit |
9 year carry-forward period 100% of profit |
|
| Depreciation | ― | For assets less than 300,000 yen, full amount is deductible | |
Note: the above corporate effective tax rates are after the April 2011 revision
