Special corporate tax for defense begins: 4% on corporate tax after a JPY 5,000,000 annual deductionWhat is the new tax for companies called the special corporate tax for defense?
For business years beginning on or after April 1, 2026 (Reiwa 8), corporations subject to corporate tax become taxpayers of the special corporate tax for defense. The tax is 4% of the corporate tax amount (calculated without applying credits such as the income tax credit) minus an annual JPY 5,000,000 deduction. It is filed and paid separately from corporate tax and local corporate tax.
- Base corporate tax amount
- JPY 10,000,000
- - Basic deduction (per year)
- JPY 5,000,000
- Taxable base corporate tax amount
- JPY 5,000,000
- x Tax rate
- 4%
- Special corporate tax for defense
- JPY 200,000
Key points
- Taxpayers: corporations subject to corporate tax on income for each business year. The taxable business years are those beginning on or after April 1, 2026 (Reiwa 8)
- Tax amount: (base corporate tax amount - basic deduction of JPY 5,000,000) x 4%. For a business year shorter than one year, JPY 5,000,000 is divided by 12 and multiplied by the number of months
- Even if the base corporate tax amount is zero, or the taxable base becomes zero after the basic deduction, a final return for the special corporate tax for defense must still be filed (stating a tax amount of zero)
- Filing deadline: as a rule, within 2 months from the day after the business year ends (the same deadline as corporate tax if that deadline has been extended)
- Interim return: required from taxable business years beginning on or after April 1, 2027 (Reiwa 9) (for corporations that file an interim corporate tax return)
What to do in practice
- Add the filing of Schedule 1 supplementary sheet 1 (or Schedule 1-2 supplementary sheet 1) to your return checklist for settlements and returns of business years beginning on or after April 1, 2026 (Reiwa 8)
- Check the forms in the full return set so that you do not forget to file even when the tax amount is zero
From business years starting in April 2026, a new tax has been added to the taxes that companies pay. It uses the company's corporate tax as a starting point, subtracts a set amount, and then the company pays 4% of what is left. Even if the tax comes out to zero, the company still has to file the paperwork.
- 1. Work out corporate taxCalculate the company's corporate tax as usual
- 2. Subtract JPY 5,000,000Subtract JPY 5,000,000 for the year from that amount
- 3. Multiply by 4%Multiplying what is left by 4% gives the new tax
- 4. FileFile the form even if the amount is zero
Points
- A tax worked out on a separate form, based on the company's corporate tax
- JPY 5,000,000 a year is subtracted from the corporate tax amount, and 4% of the rest is paid
- Even if the result is zero, the filing form must still be submitted
What the words mean
- Corporate tax
- A tax on a company's profits
- Basic deduction
- A set amount that is subtracted in advance
- National Tax Agency (NTA): NTA: Creation of the Special Corporate Tax for Defense (May 2025, revised June 2026)
This article summarizes and explains materials published by government agencies and is not advice on any individual case. Rules can change, so for actual procedures and decisions always check the latest original materials and consult professionals such as tax accountants or labor and social security attorneys. English, Simplified Chinese and Traditional Chinese versions are translations prepared from the Japanese articles for convenience. If anything differs, the Japanese text and the original source take precedence.