Skip to content

Japan

#28 overall · Score 62.3 / 100 · unchanged from 2025

Overall

#28

62.3 / 100

unchanged from 2025

Corporate

#36

43.1 / 100

unchanged from 2025

Individual

#35

48.9 / 100

unchanged from 2025

Consumption

#5

90.8 / 100

unchanged from 2025

Property

#26

50.2 / 100

unchanged from 2025

Cross-border

#31

56.0 / 100

down two places from 2025

Strengths

  • Japan has a low VAT rate of 10 percent.
  • The consumption tax base is relatively broad, covering 71 percent of consumption.
  • Japan's personal income tax rate on dividends is 20.3 percent, below the OECD average of 24.7 percent.

Weaknesses

  • Japan has a corporate tax system with a high rate of 29.7 percent, a complex system of tax rates, and poor cost recovery provisions for business investments in machinery, buildings, and intangibles.
  • Japan has a hybrid international tax system with a 95 percent exemption for foreign dividends and no exemption for foreign capital gains, while many OECD countries have moved to a fully territorial system.
  • Companies are severely limited in the amount of net operating losses they can use to offset future profits.

Component Scores

Japan category scores out of 100Corporate Taxes: score 43.1, rank 36. Individual Taxes: score 48.9, rank 35. Consumption Taxes: score 90.8, rank 5. Property Taxes: score 50.2, rank 26. Cross-Border Tax Rules: score 56.0, rank 31255075100Corporate Taxes: 43.1 (rank 36)Individual Taxes: 48.9 (rank 35)Consumption Taxes: 90.8 (rank 5)Property Taxes: 50.2 (rank 26)Cross-Border Tax Rules: 56.0 (rank 31)CorporateIndividualConsumptionPropertyCross-border
Category Rank Score vs 2025
Corporate Taxes #36 43.1 unchanged from 2025
Individual Taxes #35 48.9 unchanged from 2025
Consumption Taxes #5 90.8 unchanged from 2025
Property Taxes #26 50.2 unchanged from 2025
Cross-Border Tax Rules #31 56.0 down two places from 2025

Ranking Changes, 2014–2026

Japan's best overall rank was 20th and its worst was 29th. It ranks 28th in 2026.

Overall rank by year for JapanJapan: 2014 rank 21, 2015 rank 25, 2016 rank 20, 2017 rank 20, 2018 rank 22, 2019 rank 21, 2020 rank 24, 2021 rank 26, 2022 rank 29, 2023 rank 29, 2024 rank 27, 2025 rank 28, 2026 rank 282014201520162017201820192020202120222023202420252026Japan 2014: rank 21Japan 2015: rank 25Japan 2016: rank 20Japan 2017: rank 20Japan 2018: rank 22Japan 2019: rank 21Japan 2020: rank 24Japan 2021: rank 26Japan 2022: rank 29Japan 2023: rank 29Japan 2024: rank 27Japan 2025: rank 28Japan 2026: rank 28#21#28

OECD Context

Each row places all 38 countries on a 0–100 score scale for one measure. Japan is highlighted; the dashed line is the OECD median.

All 38 Countries' Ranks

Overall and category ranks for all 38 countries
CountryOverallCorporateIndividualConsumptionPropertyCross-border
Estonia#1#2#1#24#1#7
Latvia#2#1#8#22#4#6
New Zealand#3#31#7#1#8#14
Switzerland#4#7#9#4#36#2
Lithuania#5#3#10#23#6#16
Luxembourg#6#20#21#7#15#5
Czech Republic#7#9#4#32#5#11
Australia#8#29#14#9#3#23
Turkey#9#21#6#15#22#8
Hungary#10#5#3#38#23#4
Israel#11#11#31#11#10#18
Slovak Republic#12#24#2#33#7#17
Sweden#13#6#18#26#9#12
Costa Rica#14#35#13#6#11#29
Canada#15#17#28#8#25#28
Netherlands#16#23#30#14#20#3
United States#17#8#17#3#27#37
Austria#18#18#27#17#17#10
Germany#19#30#34#13#12#9
Norway#20#15#29#27#16#15
Mexico#21#28#26#12#2#38
Finland#22#10#24#28#21#24
Greece#23#22#5#29#30#19
Chile#24#32#23#10#13#36
Slovenia#25#14#12#30#24#30
Korea#26#26#38#2#31#34
Belgium#27#16#15#25#28#21
Japan#28#36#35#5#26#31
Ireland#29#4#36#35#18#27
United Kingdom#30#25#22#34#33#1
Denmark#31#19#37#20#14#32
Poland#32#12#11#36#29#25
Portugal#33#34#19#21#19#33
Iceland#34#13#32#19#34#26
Spain#35#33#20#18#35#20
Italy#36#27#16#37#38#22
Colombia#37#37#25#16#37#35
France#38#38#33#31#32#13

Across the OECD

Japan ranks 28th of 38 OECD countries on the overall index.

Source: 2026 International Tax Competitiveness Index.

Notes on the Data

The 2026 Index uses the most up-to-date data available as of July 2026. Data may not reflect changes in countries making rapid reforms.

Share This Tool

About the Authors

Alex Mengden Tax Foundation
Expert

Alex Mengden

Economist

Alex Mengden is an Economist at the Tax Foundation, where he focuses on international tax issues and tax policy in Europe. He holds a BA in philosophy and economics from the University of Bayreuth and an MSc in economics from the Ludwig Maximilian University of Munich.

Tax Foundation Staff

Luis Zarka

Transatlantic Tax Fellow

Luis Zarka was a 2026 Transatlantic Tax Fellow with the Tax Foundation’s Center for Global Tax Policy.

Media Contacts

Sarah Wilbur Tax Foundation Media Relations Contact

Sarah Wilbur

Communications Manager

Sarah Wilbur is Communications Manager at the Tax Foundation where she advances the organization’s institutional reach by developing its corporate communications and media programs.

Jesse Solis Tax Foundation

Jesse Solis

Vice President of Communications

Jesse Solis is Vice President of Communications at the Tax Foundation, where he leads the communications team and works to build coverage of Tax Foundation’s experts and their work across the globe. He joined the team in 2021 as Communications Manager and became Communications Director in 2024.