Japan

Japan uses a progressive national income tax system with seven brackets, ranging from 5% on income up to JPY 1,950,000 to 45% on income above JPY 40,000,000. A surtax of 2.1% (income tax for reconstruction) applies on top of the calculated income tax. Resident tax (juumin-zei) is a flat 10% (municipal 6% + prefectural 4%) levied the following year based on prior year income. Social insurance premiums are shared between employer and employee. Employee contributions include health insurance (approximately 5%), welfare pension (9.15%), unemployment insurance (0.6%), and long-term care insurance (0.8% for workers aged 40-64). Total employee contributions are approximately 15% of salary. Japan offers a dependent deduction (380,000 JPY per dependent), an employment income deduction (varying by income level), and social insurance premium deductions. The iDeCo (individual defined contribution pension) allows tax-deductible contributions up to JPY 276,000 per year for company employees with employer pensions. Capital gains on stocks are taxed at a flat 20.315% (15.315% national + 5% local). NISA (Nippon Individual Savings Account) provides tax-free investment up to JPY 3,600,000 per year. VAT (consumption tax) is 10% (8% on food and newspapers). The corporate tax rate is approximately 30% (combined national, local, and enterprise tax).