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There are two types of tax in Japan, national tax and local tax in Japan.
People who live in Japan, and people who stay in Japan continuously for
more than one year, have an obligation to pay taxes regardless of their
nationality.
The national taxes are paid to the state, and the local taxes are paid to the prefecture and the municipality. The main national tax is income tax, which usually is deducted from salary at source. The main local taxes, levied by the local government with jurisdiction over the area where you live, are the prefectural resident’s tax and the municipal resident’s tax. Japan’s income tax rate gets higher as the salary increases. Also, there are various income deductions and tax deductions, so even with the same wage, the amount that the company deducts at source and the amount of take-home pay will differ according to the types and contents of deductions.
A tax-payment certificate is required in order to receive various public
services, such as applications for public housing, applications for nursery
school admission, and applications for study assistance at the level of
compulsory education.
Rather than panicking when such an occasion arises and it is too late to do anything about it, make sure that you pay your taxes properly all the time. In addition, if you are, for example, sending money to parents or a wife living in your home country, inquire at the nearest tax office to see whether you are eligible for deductions for dependent family members. For persons paying taxes on income from both Japan and overseas, the government allows a special foreign tax deduction in order to ease the burden of double taxation.
Income tax is levied on a person’s income during the period from January
1 to December 31. Most salaried workers are not required to file individual
tax returns because taxes are deducted directly from their pay. Self-employed
persons, however, are required to calculate their income taxes for the
year and file final returns (Kakutei Shinkoku) at a tax office during the
period from February 16 to March 15 of the following year.
When filing their final tax returns, taxpayers can claim income tax refunds in the following cases (in the case of a claim, you are required to file or present evidence such as receipts for medical expenses, etc. with your final tax return):
| 1) |
When medical expenses paid over the previous year, excluding the portion covered by health insurance, exceed both 100,000 yen and five percent of your annual income amount. |
| 2) |
When the taxpayer suffered losses through disaster or theft. |
| 3) |
When the taxpayer took out a loan to purchase a home. |
Resident taxes, including both the prefectural resident tax and municipal tax, are levied by the municipal office where the taxpayer is living as of January 1. The amount is calculated on the basis of income in the preceding year plus a fixed amount. Salaried workers have this tax deducted directly from their pay in 12 installments from June until May of the following year.
Those who are self-employed must make payments in four separate installments, in June, August, October and January according to the notification sent by the municipal office (payment dates may differ depending on the municipality).
| Consumption Tax (Shohi-zei) and Local Tax (Chiho-zei) |
A five-percent tax is added to all products and services purchased.
| Automobile Tax (Jidosha-zei) |
Anyone who owns a motor vehicle is liable for paying the automobile tax.
The transportation bureau which has jurisdiction over the area in which
your residence is located will send you an automobile taxation payment
notification in May of each year. Payment of the tax can be made by submitting
this notification. You will be required to file applications with the transportation
bureau when you change addresses or no longer use your automobile.
| Light Vehicle Tax (Kei Jidosha-zei) |
Anyone who owns a light vehicle (a motorcycle, a car classified as Kei
Yonrin, etc.) as of April 1 of the year is taxed. Please note that the
tax is non-refundable (pro-rated or otherwise) even if you dispose of the
vehicle later in the year.
| Tax Payment Certificate (Nozei Shomei-sho), Income Certificate (Shotoku
Shomei-sho) |
Proof of your income is necessary when renewing or changing your status
of residence, entering your child into a public nursery or applying to
enter public housing. If you require documents of proof for your income,
you should apply at the city hall. Tax payments may be extended, reduced
or exempt if they are difficult to make due to a disaster (fire, earthquake,
etc.), illness or unemployment etc.
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