Belgium’s Ministry of Finance has confirmed that Japan’s 4% special corporate tax on defence companies, effective from 1 April 2026, falls within the scope of the Belgium–Japan Income Tax Treaty, treating the levy as substantially similar to Japan’s existing corporate income tax.
The Belgian Ministry of Finance confirmed that Japan’s 4% special corporate tax on defence, effective from 1 April 2026, falls within the scope of the Belgium–Japan Income Tax Treaty (2016). It was clarified in Circular 2026/C/80 published on 2 September 2026.
Japan’s tax authorities have activated a new special tax targeting defence companies, effective 1 April 2026. The tax, established through Act No. 69 of 2023, applies a flat 4% rate to eligible companies to generate funding for national defence resources.
Application under bilateral tax treaty
Under Article 2 Section 2 of the treaty, taxes introduced after the agreement’s signing are treated as identical or substantially similar to existing levies when structurally comparable. Japan’s special defence tax qualifies as similar in content to the corporate income tax listed in the original treaty schedule.
Belgium’s FPS Finance and General Administration of Taxation, International Relations division, issued this clarification on 2 September 2026 to establish the tax’s treaty compliance status.
As a result, the new defence tax is now incorporated into the agreement’s scope, effective from its implementation date of 1 April 2026, ensuring that neither Belgium nor Japan can claim double taxation relief on this levy while circumventing the treaty’s anti-abuse provisions.
Tax mechanism and calculation
The special tax operates as a national levy on defence corporations, with a base calculated directly from each company’s corporate income tax liability. This structure produces an effective rate increase of 0.928%, derived from applying the 4% special tax to Japan’s existing 23.20% corporate income tax rate. Companies report the tax within their standard financial year cycle.
