Does the local corporate tax rate differ by prefecture or municipality?
Local governments can set their own tax rates, but there is not much difference.
Local corporate tax is divided into prefectural tax and municipal tax. Prefectural taxes consist of enterprise tax, local corporation special tax, and Inhabitant tax (Corporate tax rate and per capita rate), and municipal taxes are divided into corporate tax and Per Capita Levy.
The standard tax rate is determined by the local tax law, but some local governments have higher tax rates for some corporations.
For example, in Osaka Prefecture, where the standard tax rate is 3.2%, the excess tax rate of 4.2% is imposed on corporations capitalized at over ¥100 million or whose corporation tax is over ¥20 million (for the fiscal years starting before October 2019). Yokohama City, the special tax called “Yokohama Green Tax” is levied additionally with Per Capita Levy of Inhabitant Tax.
In addition to the above, there are cases where local governments have taken special measures such as enterprise tax, property tax and real estate acquisition tax to attract companies.