Yokohama

1. Overview of the Tax System in Yokohama

Japan’s tax system is divided into national taxes, prefectural taxes, and municipal taxes. As a resident or visitor in Yokohama, you may encounter taxes in the following categories:

• Income Tax (所得税, Shotokuzei): A national tax on individual earnings.
• Resident Tax (住民税, Juminzei): A combination of prefectural and municipal taxes, including Yokohama-specific levies.
• Consumption Tax (消費税, Shouhizei): A national tax on goods and services, similar to a value-added tax (VAT).
• Other Taxes: These include property tax, vehicle tax, and inheritance tax, among others.

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2. Taxes in Detail

A. Income Tax (所得税, Shotokuzei)

• Who Pays: Anyone earning income in Japan, including residents and non-residents with Japan-sourced income.
• Calculation: Income tax is progressive, meaning the rate increases with income. The rates range from 5% to 45% of taxable income.
  • Taxable income is calculated by deducting allowances (e.g., for dependents, insurance premiums) from gross income.
• Currency: Paid in JPY.
• Payment:
  • For salaried employees, income tax is withheld monthly by employers and adjusted at the end of the fiscal year (year-end adjustment or 年末調整, Nenmatsu Chousei).
  • Self-employed individuals or those with additional income must file a tax return (確定申告, Kakutei Shinkoku) between February 16 and March 15 each year.
• Local Consideration: Tax filing assistance is available at Yokohama’s tax offices, and some forms are available in English.

B. Resident Tax (住民税, Juminzei)

• Who Pays: Residents of Yokohama, including foreign residents who have lived in Japan for at least one year.
• Components:
  • Prefectural Tax: Paid to Kanagawa Prefecture.
  • Municipal Tax: Paid to the City of Yokohama.
• Calculation: Resident tax is a flat rate of 10% of the previous year’s income, with a standard deduction of 430,000 JPY.
  • Example: If your taxable income in 2022 was 3,000,000 JPY, your resident tax for 2023 would be approximately 300,000 JPY.
• Payment:
  • Employers may deduct it from salaries.
  • Alternatively, individuals receive a payment slip and can pay at banks, convenience stores, or online.
• Local Consideration: Yokohama uses resident taxes to fund city services like public transportation, waste management, and education.

C. Consumption Tax (消費税, Shouhizei)

• Who Pays: Everyone purchasing goods or services in Japan.
• Rate: The national consumption tax rate is 10%, with a reduced rate of 8% for certain food and beverage items (excluding alcohol and dining out).
• Currency: Included in the price of goods and services, displayed in JPY.
• Local Consideration: Tax-inclusive pricing is common, so the price you see is typically the final price.

D. Property Tax (固定資産税, Koteishisanzei)

• Who Pays: Property owners in Yokohama.
• Rate: The standard rate is 1.4% of the assessed value of the property.
• Payment: Paid annually in four installments. Payment slips are sent to property owners.
• Local Consideration: Foreign property owners should ensure they have a Japanese bank account for easier payments.

E. Vehicle Tax (自動車税, Jidoushazei)

• Who Pays: Owners of motor vehicles registered in Yokohama.
• Rate: Based on the engine size and type of vehicle. For example:
  • A standard passenger car with a 1.5L engine may incur an annual tax of around 30,500 JPY.
• Payment: Paid annually in May via a payment slip.

F. Inheritance Tax (相続税, Souzokuzei)

• Who Pays: Heirs of deceased individuals with assets in Japan.
• Rate: Progressive, ranging from 10% to 55%, depending on the value of the inheritance.
• Local Consideration: Non-residents inheriting property in Yokohama may need to consult a tax professional for cross-border tax implications.

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3. Practical Information on Payment Procedures

• Payment Methods:
  • Taxes can be paid at banks, post offices, convenience stores, or online through platforms like Pay-easy.
  • Automatic bank transfers are available for recurring taxes like resident tax and property tax.
• Currency: All taxes are paid in Japanese Yen (JPY). Ensure you have a Japanese bank account for convenience.
• Deadlines: Each tax has specific deadlines. Missing a deadline may result in penalties or interest charges.

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4. Cultural and Systemic Nuances

• Tax Year: Japan’s tax year runs from January 1 to December 31.
• My Number System: Japan uses a national identification system called "My Number" (マイナンバー) for tax and social security purposes. Ensure you register for a My Number card upon moving to Yokohama.
• Language Barrier: While most tax documents are in Japanese, some resources are available in English. Yokohama City Hall and local tax offices often provide assistance to foreign residents.
• Tax Refunds: If you overpay taxes (e.g., through withholding), you may be eligible for a refund after filing a tax return.
• Social Insurance: Contributions to health insurance and pension systems are separate from taxes but are mandatory for residents.

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5. Unique Considerations for Yokohama

• Tourism Tax: Yokohama does not currently impose a specific tourism tax, but visitors are subject to the national consumption tax.
• City-Specific Services: Resident taxes fund Yokohama’s unique services, such as its extensive public transportation network, international schools, and cultural events.
• Support for Foreign Residents: The Yokohama Association for International Communications and Exchanges (YOKE) offers multilingual support for tax-related inquiries.

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6. Summary of Key Tax Rates

| Tax Type | Rate | Who Pays | |-----------------------|-----------------------------------|-----------------------------------| | Income Tax | 5%–45% (progressive) | Individuals earning income | | Resident Tax | 10% of previous year’s income | Yokohama residents | | Consumption Tax | 10% (8% for certain items) | Consumers | | Property Tax | 1.4% of assessed property value | Property owners | | Vehicle Tax | Varies by engine size | Vehicle owners | | Inheritance Tax | 10%–55% (progressive) | Heirs of Japanese assets |

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7. Tips for Newcomers

• Seek Professional Help: Tax laws can be complex, especially for foreigners. Consider consulting a tax accountant (税理士, Zeirishi).
• Stay Organized: Keep records of income, expenses, and tax payments to simplify filing.
• Use Online Tools: The National Tax Agency (NTA) website offers calculators and resources in English.

By understanding these taxes and fees, you can better navigate life in Yokohama and ensure compliance with local regulations.