Guide to Living in Tochigi

• Consumption Tax〔SHOHI ZEI〕
• Income Tax〔SHOTOKU ZEI〕
• Residence Taxes〔JUMIN ZEI〕
• Motor Vehicle Tax〔JIDOSHA ZEI〕

Consumption Tax〔SHOHI ZEI〕

With the exception of medical treatment, social services and education-related materials, all purchased goods and services offered are taxed at 5% of the purchase price. Of this 5%, 4% is national consumption tax, and 1% is local consumption tax.

Income Tax〔SHOTOKU ZEI〕

Personal income tax is levied on income earned between January 1 and December 31. This income is calculated as the total earned during the year, minus certain expenses. Once you have calculated your income level and determined your tax bracket, you should file a tax report at your local tax office, between the dates of February 16 and March 15 of the following year. If you are a salaried employee, your company may have chosen to deduct the tax from your income on a monthly basis.

Salaried employees might receive a tax refund in the following cases:

1. If medical costs are high and one’s personal expenses exceed a certain limit
2. If there are damages or losses to one’s personal assets due to a natural disaster or theft
3. If, under specific circumstances, one is purchasing a home by means of a financial loan
4. If an individual terminates his/her employment during the fiscal year, and the income withheld exceeds the amount of tax owed.

　For further information, please ask your local tax office.

Income Tax Withholding [GENSEN CHOSHU]

• The System of Withholding Income Tax:

  An individual’s income tax is calculated based on the income he/she receives over the course of a year. The individual is required to file a report on said income and pay the appropriate amount.

• Withholding Tax on one’s Salary/Wages:

  The income tax laws of this country deal with tax withholding differently, based on whether an individual is considered a resident or a non-resident. However, the distinction between a resident and a non-resident is not determined by that individual’s nationality or residency qualifications (ie. Immigration visa).

• Withholding Tax for Residents:

  Every month, a person’s income tax is deducted from their salary and bonus, (if applicable). In December, that individual’s income tax amount for the entire year will be calculated and adjusted for any excesses or deficiencies. This is called the year-end adjustment.

• Withholding Tax for Non-Residents:

  If a non-resident of Japan has a domestic source of income that would otherwise be subject to taxation, as a general rule that individual must pay income tax on those earned wages.
  The standard tax rate applied to wages and financial remuneration for human labor, etc., is 20% of one’s income. However, there are situations where Japan and the individual’s home country have a tax treaty. In this case, if the aforementioned tax rate of 20% exceeds that stated in the tax treaty, the tax rate as decided in the tax treaty will be applied.

Tax Declaration〔KAKUTEI SHINKOKU〕

If you are a non-salaried taxpayer, after calculating your income earned and taxes due for the year, you should submit an income tax report and pay the amount owed. The tax reports must be filed at the local tax office between February 16 and March 15.

Absence from Japan for More Than a Year〔１年以上日本から出国する場合〕

If a taxpayer is planning on being absent from Japan for more than one year, he or she must choose a proxy to pay their taxes.　 If unable to find a proxy, he or she must pay the amount due before leaving Japan.

Links:
National Tax Agency Website (Japanese)
National Tax Agency Website (English)

Residence Taxes〔JUMIN ZEI〕

As of January 1st, persons who have resided in Japan for more than a year, or those persons with intent to reside in Japan for at least a year after arriving, are subject to taxation. The amount one is taxed is calculated based on the previous years income.
However, according to certain Tax Treaty stipulations there are circumstances where one is exempt from taxation. For more information please consult the local government office of the city/town where you claimed residence on January 1st.

Salaried Employees

As a rule, the residence tax of a salaried employee is calculated by the local government on the basis of a report from the employer. The residence tax is deducted from the salary in 12 installments, from June until May of the following year.

Non-Salaried Employees

Non-salaried taxpayers usually pay a residence tax calculated on the basis of their income tax report, in four separate installments (June, August, October and January). Notification is sent by the local government. Since payment dates may differ depending on the town, please contact your local government for more information.

Absence from Japan for More Than a Year:

If a taxpayer is planning on being absent from Japan for more than one year, he or she must choose a proxy to pay their taxes. If unable to find a proxy, the taxpayer must pay the amount due before leaving Japan.