Japan Corporate Tax Interim Payment Calculator
Enter last fiscal year's confirmed corporate tax and the number of months in the current fiscal year to estimate Japan's interim (provisional) tax payment for corporate tax, local corporate tax, and enterprise tax, free.
What Is a Corporate Tax Interim Payment
This calculator estimates the interim (provisional) tax payment a Japanese company must make partway through its fiscal year. Enter last fiscal year's confirmed corporate tax, local corporate tax, and enterprise tax, plus the number of months in the current fiscal year, and it estimates how much is due under the prior-year-basis method.
Companies whose fiscal year exceeds 6 months are generally required to prepay part of their annual tax liability before the year-end settlement. There are two ways to calculate this: the prior-year-basis method (a mechanical calculation from last year's confirmed tax, covered by this tool) and the pro forma settlement method (based on an interim settlement of the first half of the current year). This tool is aimed at accounting staff preparing for an upcoming interim filing, as well as those evaluating whether to incorporate a business in Japan.
How to Use
- Enter last fiscal year's confirmed corporate tax Enter the corporate tax amount confirmed on your most recent tax return.
- Enter last fiscal year's confirmed local corporate tax and enterprise tax Enter the local corporate tax and enterprise tax (including special corporate enterprise tax) confirmed on the same return.
- Enter the current fiscal year length If the current fiscal year is shorter than 12 months (e.g., due to a fiscal year-end change), enter the actual number of months. Otherwise, use 12.
- Review the results See whether an interim filing is required and the estimated interim payment broken down by tax.
Tips for getting more out of it
- The interim tax amount is calculated as "last fiscal year's confirmed tax ÷ current fiscal year length in months × 6" (the prior-year-basis method). If last fiscal year was 12 months, the interim amount is simply half of the confirmed tax.
- There is no ¥100,000 small-amount exemption for enterprise tax and special corporate enterprise tax under the prior-year-basis method (that exemption only applies to corporate tax and local corporate tax). This tool's enterprise tax figure is shown as a reference estimate only.
- Instead of using last year's results, a company can choose to file an interim return based on a "pro forma settlement" of the first half of the current fiscal year. This can reduce the interim payment if first-half results are significantly worse than the same period last year.
- Newly incorporated companies are generally exempt from the interim filing requirement for their first fiscal year and the one after it, since there is no prior confirmed corporate tax amount to base the calculation on.
- For an official interim tax return, confirm the details with a licensed tax accountant.
Use Cases
Budgeting funds for an upcoming interim filing
As the interim filing deadline approaches, estimate the payment due from last year's results so you can set aside funds in advance.
Checking the interim amount after a fiscal year-end change
If a fiscal year-end change made the prior fiscal year shorter than 12 months, confirm the correctly annualized interim amount.
Checking eligibility for the ¥100,000 filing exemption
Companies with modest prior-year results can check in advance whether they are exempt from the interim filing requirement itself.
Glossary
- Interim Tax Filing
- A tax filing procedure required of companies whose fiscal year exceeds 6 months, prepaying part of their annual corporate tax liability partway through the year rather than waiting until year-end settlement.
- Interim (Provisional) Tax Amount
- The amount due at the interim filing stage, calculated mechanically from last fiscal year's confirmed tax under the prior-year-basis method.
- Pro Forma Settlement
- An alternative method of calculating the interim tax amount based on an interim settlement of the first half of the current fiscal year, rather than last year's results. Sometimes chosen when first-half results have deteriorated.
- Deemed Filing
- A provision under which a company that does not submit an interim return (for example, because the amount is ¥100,000 or less) is deemed to have filed for the prior-year-basis amount.
- Local Corporate Tax
- A national tax calculated as a percentage of corporate tax liability. At the interim stage, it is calculated from the interim corporate tax amount in the same way.
- Enterprise Tax
- A local (prefectural) tax on business activity. At the interim stage, it is estimated from last fiscal year's confirmed enterprise tax amount using the same prior-year-basis method.
Frequently Asked Questions
Side Note — Why Interim Tax Is Calculated as "Half of Last Year"
Japan's interim tax filing system requires companies whose fiscal year exceeds 6 months to prepay part of their corporate tax partway through the year, rather than settling everything at year-end. This spreads out national tax revenue collection instead of concentrating it once a year, while also easing the cash-flow burden on companies that would otherwise face one large payment at settlement.
The formula — dividing last fiscal year's confirmed tax by the number of months in that year and multiplying by 6 — looks more complicated than a simple "half," but it exists to handle fiscal years that are not exactly 12 months. If the fiscal year is 12 months, the ratio is simply 6/12, but if a company changed its fiscal year-end and the prior year was only 10 months, multiplying by 6/10 instead fairly restates last year's results as an annualized figure before halving it.
The exemption for companies whose interim corporate tax comes to ¥100,000 or less is a practical accommodation. It avoids imposing a disproportionate administrative burden and accounting cost on small companies for what would otherwise be a trivial interim payment.