Taxes in Japan: Filing Japanese Income Tax in Japan
For many foreign residents living in Japan it’s possible that the confusion and hours or research spent in filing Japanese taxes are negligible since their companies file on their behalf.
However, if 1) you’re self-employed, 2) your company happens to be based overseas, or 3) your company doesn’t provide tax filing services to employees, then there are a few steps you must take before Japan’s mid-March filing deadline. Let’s take a look.
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Who needs to pay taxes in Japan?
If you’ve had some type of income in Japan, chances are you owe the Japanese government. Three categories exist for compulsory tax payers: Residents, Non-Residents, and Temporary Residents.
Residents
These are people who have a domicile in Japan through ownership or rental for one (1) year or more. Additionally, if your employment contract expresses a term of a year or more, you may be considered a resident with or without a listed domicile. Residents are also taxed on their income worldwide.
Non-Residents
These are people who are not domiciled in Japan. Even if you do not live in Japan, any income earned in the country is subject to taxation. However, if you are domiciled in Japan for five years or less and you are not a Japanese national, you are considered a non-resident. Please be aware of the above. If you have an employment contract that has a long term, you may be subject to taxation. And as below, money brought into Japan will be taxed.
Temporary Residents
These are people who come to Japan and work temporarily outside of Japan while being on a foreign payroll. Income from overseas that is not remitted to Japan is exempt from taxation. However, if income is transferred into Japan for any reason, such as to pay for a bill or goods, or even into a Japanese bank, then that remitted money is considered taxable income.
Which forms are needed to file your taxes?
In recent years, many people have completed their applications online. This is convenient if you have someone who understands Japanese or can assist you in Japanese.
Tax offices also offer advice on tax returns, although this service is only available in Japanese. Check here for the tax office with jurisdiction and make an appointment before going. Some municipal offices also offer consultation services however, as they may not be able to answer about certain types of taxes, it would be best to consult the tax office.
[ Form A ]
Form A is for individuals with taxable income in Japan. For the majority of filers, form A will suffice.
[Note] From January 2023, Declaration Form A will be discontinued and replaced by Declaration Form B.
[ Form B ]
If you have any income from real estate, investments, or business operations, this form must be filled out and attached.
Withholdings Tax Slip :
Around December (or sometimes August), your withholdings tax slip is provided to you by your employer or mailed to the address that you registered with the municipality you are domiciled. If you do not have this slip in your possession, you should make a trip to the city hall in the municipality of your registration.
When to Pay Taxes
If you are required to pay taxes beyond the amount withheld by your employer, Japan’s national income taxes are due in full by the March 15 deadline of the following year.
Prefectural and municipal income taxes may also be required if not withheld by your employer and are to be prepaid quarterly if filing Form B.
Paying Taxes in Your Home Country
While this guide has been created to provide a brief overview of Japan’s income tax process, it is important to remember that if you hold citizenship or permanent resident status in another country you may be responsible for filing there as well. Please consult with your respective country’s internal revenue office for more information.
We hope this article has been helpful in guiding you to some resource for preparing and filing your Japanese taxes. And since tax season isn’t the only time you’re required to pay up, we’ve compiled a list of payment methods for paying bills in Japan.
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