12. Taxes
About Taxes
Regardless of their nationality, all residents living in Japan have to pay taxes. Two classifications of taxation are "national tax" and "local tax". The main taxes are listed below.
| Income Tax (National Tax) | Income tax is levied on an individual's income earned from January 1st to December 31st. |
| Residential Tax (Prefectural and Municipal Tax) |
Residential tax is levied on an individual's income earned from January 1st to December 31st. |
| Consumption Tax and Local Consumption Tax (National Tax and Local Tax) |
These taxes are levied on most purchases and services except the transfer of land or negotiable securities, insurance, interest, social insurance medical treatment, social welfare work, childbirth expenses, tuition fees. The current consumption tax is 5%. |
| Light Vehicle Tax (Municipal Tax) |
This tax is levied on all people who own or use light vehicles, motorcycles (regardless of engine displacement), and scooters, as of every April 1. |
| Automobile Tax (Prefectural Tax) |
This tax is levied on each automobile owned in Japan (except light vehicles, motorcycles, and scooters) as of every April 1. |
| Automobile Tonnage Tax (National Tax) |
This tax is levied on the automobile tonnage (including motorcycles of more than 251cc), paid before new automobile registration or safety inspection. |
| Automobile Acquisition Tax (Prefectural Tax) |
This tax is levied on new automobiles (except motorcycles and scooters) when you purchase them. Even when you purchase used automobiles (four-wheeled), the tax may be levied. |
※If you are a foreigner, income tax and residential tax differs depending on the period of stay and your occupation. Enquire at the tax office, Prefectural General Affairs Office, or the municipal office in your area for further information.
Income Tax and Final Income Tax Return
Income tax is levied on an individual's income earned from January 1st to December 31st of the taxation year. The method of payment for income tax is different for salaried employees and non-salaried employees.
| Salaried Employee | An employer withholds income tax from their employee's monthly salary before payment (tax withholding) and pays income tax on their behalf. Every December, the employer corrects the difference of tax amount between estimated tax and actual tax for one year (year-end adjustment). Therefore, you do not need to declare for income tax by yourself except in the following circumstances:
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| Non-Salaried Employee | You need to calculate annual salary and tax earned from Jan 1st to Dec 31st by yourself. You must declare your income and pay income tax to the tax office in your area between February 16th and March 15th in the following year. It is called "final income tax return". |
You may claim a tax refund by declaring deductions for the following items.
- Paying medical expenses more than a certain amount (This does not apply to those in Japan for less than one year.)
- Loss because of disaster or theft
- Paying the premium of social insurance such as National Health Insurance or National Pension Plan
※There are other cases where you may claim a tax refund. Please contact the tax office in your area for further information.
Residential Tax and Payment
There are two types of residential tax. They are "prefectural" and "municipal" taxes. Tax is levied on you by the municipality in the area where you live as of January 1st. Both taxes have two types which are "kintou-wari" and "shotoku-wari". Kintou-wari means that a certain tax is levied if you receive income more than a designated amount. Shotoku-wari means that tax is levied depending on the income received during the previous year. (If you receive some income in the previous year, residential tax is levied even if you do not receive any income in the current year.) Tax relief is available for those who, as of December 31 of the previous year, have a spouse who earns a very low income, and who has dependents. For information about tax relief, ask the accounts department in your company or ask your municipality.
【Payment】
| Salaried Employee | In principle, the amount calculated by the municipality, based on income reporting provided by the employer, is deducted from your salary 12 times from June to May of the following year. |
| Non-Salaried Employee | Usually, a tax payment notification or a funds transfer form of tax calculated according to final income tax return is sent to you from the municipality. You need to pay tax in June, August, October, and January at your nearest financial institution. If you receive income in the previous year and a report of salary payment is not submitted from your company to the municipality where you live, but you do not need final income tax return, you have to submit the declaration of residential tax to your municipality. The period to declare this is the same as for final income tax return. |
◆Inquiries◆
| Income Tax・・・・・Hamada Tax Office Tel (0855)22-0360 Residential Tax・・・・・Hamada City Office / Taxation Division / Municipal Tax Section Tel (0855)22-2612 Ext.131 Light Vehicle Tax・・・・・Hamada City Office / Taxation Division / Municipal Tax Section Tel (0855)22-2612 Ext.123 Automobile Tax・・・・・Hamada General Affairs Office Tel (0855)29-5521 |
