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Filing and Payment Procedures

The process for filing tax returns and paying taxes, including deadlines and methods for residents and non-residents.

Sections

Who Needs to File a Tax Return?

You must file an income tax return (็ขบๅฎš็”ณๅ‘Š, Kakutei Shinkoku) if:

  • You are self-employed or a freelancer.
  • You have multiple sources of income.
  • You earned more than ยฅ200,000 in additional income (e.g., side jobs, rental income) outside of your main employment.
  • You are a non-resident earning Japan-sourced income.
  • You want to claim deductions (e.g., medical expenses, dependents, or donations).

If you are a salaried employee and your employer withholds taxes, you generally do not need to file unless you meet the above conditions.

Filing Deadlines

  • Income Tax Filing Period: February 16 to March 15 of the following year.
  • If the deadline falls on a weekend or holiday, it is extended to the next business day.

Filing Process

  1. Gather Necessary Documents:

    • Gensen Choshu Hyo (ๆบๆณ‰ๅพดๅŽ็ฅจ): A certificate of income and tax withheld, provided by your employer.
    • Receipts for deductible expenses (e.g., medical bills, donations).
    • Bank account details for refunds.
    • My Number (ใƒžใ‚คใƒŠใƒณใƒใƒผ) card or notification.

  2. Choose a Filing Method:

    • Online (e-Tax): Japanโ€™s electronic tax filing system. Requires registration and a My Number card.
    • In-Person: Submit forms at your local tax office (็จŽๅ‹™็ฝฒ, Zeimusho).
    • By Mail: Send completed forms to your local tax office.

  3. Complete the Tax Return Form:

    • Use Form A (for salaried employees) or Form B (for self-employed individuals).
    • Calculate your taxable income, deductions, and tax liability.

  4. Submit the Return:

    • Submit online, in person, or by mail before the deadline.

Payment Methods

  • Bank Transfer: Pay at a bank or post office using a payment slip.
  • Convenience Stores: For amounts under ยฅ300,000.
  • Credit Card: Through the NTAโ€™s online payment system.
  • Direct Debit: Requires prior registration.
  • Cash: At your local tax office.

4. Resident Tax Filing and Payment

Who Pays Resident Tax?

  • Resident tax is paid by individuals who have lived in Japan as of January 1 of the tax year.
  • It is based on the previous yearโ€™s income.

Filing and Payment Process

  • Resident tax is calculated and billed by your local municipal office.
  • If you are a salaried employee, your employer may deduct it from your salary.
  • If self-employed, you will receive a tax bill in June, with payments due in four installments (June, August, October, and January).

5. Consumption Tax

  • The current rate is 10% (8% for food and non-alcoholic beverages).
  • Businesses earning over ยฅ10 million annually must register and file consumption tax returns.
  • Visitors to Japan can enjoy tax-free shopping for purchases over ยฅ5,000 at participating stores (passport required).

6. Tax Deductions and Credits

Japan offers various deductions and credits to reduce your tax liability:

  • Basic Deduction: ยฅ480,000 for all taxpayers.
  • Dependent Deduction: For supporting family members.
  • Medical Expense Deduction: For out-of-pocket medical costs exceeding a certain threshold.
  • Insurance Premium Deduction: For life, health, and earthquake insurance.
  • Charitable Donations: Deductible if made to approved organizations.

7. Penalties for Late Filing or Payment

  • Late Filing Penalty: 5-20% of the unpaid tax amount.
  • Late Payment Penalty: 7.3% annually (or higher if the official interest rate increases).
  • Underreporting Penalty: 10-15% of the underreported amount.

To avoid penalties, file and pay taxes on time. If you cannot pay in full, consult your tax office to arrange an installment plan.

8. Country-Specific Considerations

  • Language Barrier: Most tax forms and resources are in Japanese. Consider hiring a tax consultant or using translation services.
  • Tax Treaties: Japan has tax treaties with many countries to avoid double taxation. Check if your home country has an agreement with Japan.
  • My Number System: Ensure you have a My Number card, as it is required for tax filing and other administrative processes.
  • Cultural Norms: Japanese tax offices are known for their strict adherence to rules. Be prepared with all required documents and follow procedures carefully.

9. Costs Associated with Filing

  • Filing taxes is free if you do it yourself.
  • Hiring a tax consultant or accountant can cost between ยฅ30,000 and ยฅ100,000, depending on the complexity of your return.

10. Resources for Assistance

  • National Tax Agency (NTA): https://www.nta.go.jp
  • Tax Office Locator: Use the NTA website to find your local tax office.
  • Helpline: The NTA offers a multilingual helpline for tax inquiries.

By following this guide, visitors and immigrants can navigate Japanโ€™s tax system effectively and ensure compliance with all legal and administrative requirements.