What is “Business Office Tax”
Business Office Tax is a local tax that is levied to businesses that meet certain criteria. Unlike other local taxes, this tax is levied only in cities that include 23 special wards of Tokyo, cities with a population of 300,000 or more, and ordinance-designated cities. The business office tax is levied on the floor area of business premises and on the gross salaries of employees. Taxation on the floor area of business premises is called ‘property-based‘ taxation, while taxation on the total amount of employees’ salaries is called ‘employee-based‘ taxation.
Taxation system and rate
Property-based taxation:
If the total floor area of the business premises located in the relevant cities exceeds 1,000 ㎡, 600 yen per square meter.
Employee-based taxation:
If the total number of employees exceeds 100, 0.25% of gross salaries.
Tax exemption
Floor area exemption
Welfare facilities such as entertainment and educational rooms, dining areas or canteens (for employees’ use) are exempt. However, locker rooms that require employees’ wear uniforms or rest rooms that can be used for meetings are not exempt.
Employees exempted from gross salary
In the employee-based taxation, the salary of persons over 65 and disabled persons is deducted from the gross salary. For part-time employees, their number is excluded from the criteria, but if the employer is still taxable, their salary will be included in the gross salary amount.
Tax filing for Business Office Tax
Business office tax returns include returns for
- Tax payment
- Businesses who are under tax-exempt points
- Newly established or closed businesses
- Businesses who have businesses premises lease
Please note that even if your business is less than the criteria, you may have met the conditions of the under tax-exempt points which is one of the tax filing mentioned above.
For more information, please feel free to contact us at Seventh Sense Group!
This information is for general informational purposes only and should not be considered as professional advice. Please consult with us or a qualified professional for any specific questions you may have.
