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