Income Tax Guide for Foreigners＞Income Tax Guide for Foreigners＞No.12001 Income Tax Information for Foreigners in Japan
No.12001 Income Tax Information for Foreigners in Japan
Introduction
During your stay in Japan, you may incur income tax obligations.
This page is intended to inform you of this possibility and the general requirements of the Japanese Income Tax law.
Resident Status
The Japanese Income Tax Law provides the scope of taxable income in accordance with resident status. Therefore, first of all, you should know your resident status. Resident status is classified into Resident and Nonresident. Resident is further divided into Non-permanent resident and Permanent resident.
The following is a brief explanation of resident status.
(1) Resident
A person who has a "JUSHO"(domicile) in Japan or has had a "KYOSHO"(residence) in Japan for one year or more.
NOTE：enerally speaking, you have a "JUSHO" in Japan if your principal establishment for living is in Japan and you have a "KYOSHO" in Japan if you are staying or living in Japan without "JUSHO".
(i) Non-permanent resident
A resident who is not a Japanese national and has had his/her "JUSHO" or "KYOSHO" in Japan for an aggregate period of five years or less within the last ten years.
(ii) Permanent resident
A resident other than non-permanent resident.
(2) Nonresident
A person other than resident.
Taxable Income
The following table shows the scope of taxable income according to your resident status.
| CLASSIFICATION | SCOPE OF TAXABLE INCOME | ||||
|---|---|---|---|---|---|
| INCOME FROM SOURCES IN JAPAN | INCOME FROM SOURCES ABROAD | ||||
| PAID IN JAPAN | PAID ABROAD | PAID IN JAPAN | PAID ABROAD | ||
| RESIDENT | NON-PERMANENT RESIDENT | Taxable | Taxable | Taxable | Only the portion deemed remitted to Japan is taxable. (This means that the remainder retained abroad is not taxable.) |
| PERMANENT RESIDENT | Taxable | Taxable | Taxable | Taxable | |
| NONRESIDENT | Taxable in principle | Not taxable | |||
NOTE: (1)"INCOME FROM SOURCES IN JAPAN" is stipulated in the Japanese Income Tax Law. For example, salaries, wages or other compensation for personal services performed in Japan are treated as "INCOME FROM SOURCES IN JAPAN" whether they are paid in Japan or abroad. (See code no.12006 for details.)
(2)"INCOME FROM SOURCES ABROAD" is other than "INCOME FROM SOURCES IN JAPAN".
Filing Income Tax Return
In Japan, the individual income tax is based on the self-assessment system, under which each taxpayer is required to compute his/her tax base and tax amount, file a final return to a tax office and pay the tax amount accordingly.
In principle, a taxpayer must add up income for the year, including those income from which taxes were withheld, such as salaries and make a settlement of annual tax liability by filing a Final Tax Return for the year.
Who Must File
You must file a Final Tax Return in principle if you come under any of the following cases.
RESIDENT
1 Employment Income Earner
(Salaries, wages, bonuses and other allowances of a similar nature)
(1) Your total employment income receipts exceed \20,000,000.
NOTE: In case you receive employment income from only one payer in Japan and the total receipts are equal to or less than \20,000,000, your tax liability for this income is to be settled by the year-end adjustment of withholding tax.
So you are not required to file a Final Tax Return.
(2) Your employment income is paid abroad.
(3) You receive employment income from only one payer in Japan, and your total amount of various kinds of income other than employment and retirement income exceed \200,000.
(4) You receive employment income from two or more payers, and your employment income receipts (excluding employment income subject to year-end adjustment) and total amount of various kinds of income other than employment and retirement income exceed \200,000.
(5) Your employment income is exempt from withholding income tax.
(6) You are a director of a family company, or a relative of the director thereof, and receive interest on loans or rent for property from the company, besides remuneration.
2 Earner whose Income is other than Employment Income
The amount of tax calculated based on your total income less the total amount of the basic exemption and other deductions from income is greater than the sum total of your tax credit for dividends.
NOTE: You may claim a tax refund by declaring such as deductions for medical expenses on your final tax return even if you are not required to file a Final Tax Return.
NONRESIDENT
(1) You have income from sources in Japan, such as income from a business carried on in Japan, income from the disposal of assets located in Japan, and rent for the use of real estate located in Japan.
(2) You have income from personal services performed in Japan, such as salaries, wages and other remuneration which are not subject to withholding tax in Japan.
NOTE: In general, you can not file except the above cases (1),(2), because your tax liabilities are settled by separate withholding taxation at source.
When and Where to File
You are required to file your final tax return for the year to the tax office which has jurisdiction over your "JUSHO" or "KYOSHO" during the period from February 16 to March 15 of the following year and to pay the tax by March 15.
In case you are leaving Japan without designating a person to administer your tax affairs, you must file your final tax return and pay the tax by the time of your departure from Japan.
It may be useful to refer to code no.12004, "Tax information for an individual who will leave Japan".
Estimated Tax Prepayment
As a rule, if your "basic tax amount to be prepaid in a year" comes to \150,000 or more, you must make prepayments for your estimated tax in the year. And the amount will be notified by the tax office.
NOTE: "basic tax amount to be prepaid" is, in short, the tax on total taxable income less the tax withheld in the preceding taxable year.
The estimated taxes are to be settled by filing the final tax return for the year.
Penalties on Tax
In principle, if you fail to file a correct tax return by due date, you will incur an additional tax and a delinquent tax.
If you need further information on this matter, please contact;
TOKYO REGIONAL TAXATION BUREAU (TOKYO KOKUZEI-KYOKU)
03-3821-9070
Time:
9:00a.m-5:00p.m
OSAKA REGIONAL TAXATION BUREAU (OSAKA KOKUZEI-KYOKU)
06-6941-5331
Ext.62205
Time:
9:00a.m-5:00p.m
NAGOYA REGIONAL TAXATION BUREAU (NAGOYA KOKUZEI-KYOKU)
052-971-2059
Time:
9:00a.m-5:00p.m
If the line is busy, please call again
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-----Your taxes help to sustain our community-----