The Czech Republic has confirmed that Japan’s new 1% defence surtax, effective from 1 January 2027, is covered by the countries’ double taxation treaty, alongside changes to Japan’s reconstruction surtax.
The Czech Republic’s Ministry of Finance has published Financial Bulletin No. 15/2026, confirming that Japan’s new 1% defence surtax, effective 1 January 2027, qualifies as a covered tax under the countries’ 1977 income tax treaty. The communication covers the 1977 double taxation treaty between the Czech Republic (formerly the Czechoslovak Socialist Republic) and Japan.
This follows the Czech Republic’s Ministry of Finance confirming on 5 November 2025 that Japan’s Special Corporation Tax for Defence is covered by the countries’ existing double taxation treaty.
How the defence surtax works
The tax is called the Special Income Tax for Defence. It is set at 1% of the income tax payable. Individuals pay it no matter how their tax is collected. Companies pay it only on tax withheld at source.
For individual income tax that is not withheld, the surtax is calculated on a calendar year basis. For income subject to withholding, it is collected at the time of payment.
Changes to the reconstruction surtax
Japan is changing its Special Income Tax for Reconstruction at the same time. That surtax remains a covered tax under Article 2(1). Its rate falls from 2.1% to 1.1%, and its collection period runs 10 years longer, until 2047.
