This survey was carried out by PwC Japan Tax (Zeirishi-Hojin PricewaterhouseCoopers) from July to November 2011, using the PwC Total Tax Contribution (TTC) framework that was developed by PwC UK.
This second survey has been carried out with the full support of the Japan Business Federation (Keidanren). This survey covers the periods ended March 2010 (FY 2009) and March 2011 (FY 2010). 41 corporate groups participated in the survey representing Japan’s leading players in their sector. The aim of the survey is to identify the actual amount of taxes and social security contributions paid by these companies. This amount includes taxes collected from their customers or employees on behalf of the government. The burden of taxes associated with a company’s business activities will affect its decision of where to operate and impact its domestic and international competitiveness and thus overall performance.
Usually, effective tax rates are used to compare tax burdens across international operations. This survey will shed light on the overall tax burden of Japanese companies, and how they compare to their counterparts in other countries.
By carrying out this survey on a continuous basis, we should be able to show and trend the impact of tax rate reductions, tax basis expansion and special surtaxes for funding the recovery from the earthquake disaster on a company’s actual tax burden. In addition, the survey results show the trend where corporate income tax as a percentage of a company’s tax burden decreases in recessionary times while the social tax contribution portion goes up.
We hope that this survey will provide useful information for future discussions on the enhancement of global competitiveness of Japanese companies from a tax burden perspective. Recently, the large private sector tends to be under pressure to disclose its total tax contribution to the public finances and improve transparency. This survey is expected to contribute towards the latter and towards greater transparency.
Section I. Executive summary
Section II. Total Tax Contribution framework
Section III. Results of FY 2009/10 survey
Section IV. Movements in the recent 4 years
Section V. Industry comparisons
Section VI. Cost of tax compliance