|International Tax Rules||21||70.84|
Japan ranks 28th overall on the 2019 International Tax Competitiveness Index, the same as in 2018.
- Japan has a low VAT rate of 8 percent applied to a broad base.
- Corporate and consumption taxes are less complex than they are on average in the OECD.
- Japan's personal income tax rate on dividends is 20.3 percent, below the OECD average of 23.8 percent.
- Japan has poor cost recovery provisions for business investments in machinery and buildings.
- Japan has a hybrid international tax system with a 95 percent exemption for foreign dividends and no exemption for foreign capital gains.
- Companies are severely limited in the amount of net operating losses they can use to offset future profits, and companies cannot use losses to reduce past taxable income.