Living Infomation

Comprehensive Living Guide for Foreign Residents in Japan

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Tax

There are mainly two categories of Japanese taxes; national tax and local tax.
The national tax is paid to the national government, while the local tax is paid to the local prefectural governments and municipal authorities (ward/city/town/village) where you live.
Expenses for social welfare, healthcare, public works projects, education, police, and the fire service are paid from taxes.
Regardless of nationality, anyone who lives in or temporarily stays in Japan while working and getting paid during their stay is subject to the Japanese taxation system.
In this section, we have listed basic taxes mainly for individuals which may arise in your daily life, along with information about their types and payment methods. Besides those listed, a variety of other taxes exist. For details, contact National Tax Agency, Tokyo Metropolitan Government's Bureau of Taxation, or their local tax offices.

Type of tax

The Japanese taxation system is largely divided into two categories; national tax and local tax. Each category is further classified into a variety of categories.

National tax

National tax is paid to the national government. National tax is largely divided into direct tax and indirect tax.

Type of tax

*The above list does not cover all tax types.

Income tax :
on annual income of individuals.
Inheritance tax :
on inherited property.
Gift tax :
on property presented by individuals.
Consumption tax :
on sales/loans of merchandise or provisions of services. Service companies and sellers are required to collect the amount equivalent to consumption tax payments from consumers and pay the sum collected to the national government. General merchandise and services are subject to consumption tax.
Alcohol tax :
on sake, beer, whiskey, and other alcohol products.
Document-related stamp tax :
on official documents such as contracts and receipts. Paid by affixing stamps similar to postage stamps on the documents.
Vehicle weight tax :
for the issue of vehicle inspection certification and vehicle numbers.
Customs duty :
on goods imported from outside Japan. Overseas souvenirs that exceed the exemption limit are also subject to customs duty.
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Local tax

The local tax is paid to the local prefectural/municipal governments. Residents in Tokyo are subject to the metropolitan tax and the ward/city/town/village tax. Both metropolitan and municipal taxes are composed of general tax and special purpose tax.

Local tax

*Taxes listed here are intended as representative examples.
*In Tokyo's 23 words, fixed asset tax and urban planning tax are imposed by the TMG.

Metropolitan inhabitants' tax (individual) :
per capita tax and per income tax on individual residents in Tokyo.
Enterprise tax (individual): on income earned by individual business owners :
on income earned by both corporate and personal businesses.
Local consumption tax :
imposed on transactions applicable to national consumption tax.(total amount of tax for each transaction includes both national and local taxes)
Real estate acquisition tax :
on the acquisition of real estate including lands and buildings. Both purchased and gifted properties are taxable. Targets both registered and unregistered properties.
Automobile tax :
on the possession of automobiles.
Automobile acquisition tax :
on the acquisition of automobiles.
Light oil delivery tax :
on the amount of light oil delivered to retailers or purchasers.
Municipal inhabitants' tax (individual) :
to be paid to the local municipal authority. On both per capita and per income basis.
Fixed property tax :
on land, building, and business depreciative properties.
Light vehicle tax :
on the possession of light automobiles and motorcycles.
Urban planning tax :
on real estate including lands and buildings located in the areas designated for urbanization.
National health insurance tax :
on the householder insured by national health insurance.
*May be collected as national health insurance premiums.
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Tax imposition and payment

It is your responsibility to pay the imposed amount of taxes accordingly to the national government, Tokyo Metropolitan government, and local authorities. Listed below are various taxation systems practiced in Japan. Contact your local tax office, metropolitan tax office, or city hall for details about how to calculate taxes.

  1. Self-assessment taxation

    A taxpayer calculates and determines the amount of taxes by him/herself and files a return to the concerned authorities. This taxation system is applicable to national taxes including income tax, inheritance tax, gift tax, consumer tax, as well as to local taxes including automobile acquisition tax.
  2. Ordinary collection

    Metropolitan tax offices and other taxation authorities calculate the amount of tax according to designated legal calculation methods and send a notice to taxpayers that includes the information regarding tax amounts, payment deadline and payment locations. The taxpayers who have received this notice are required to take a payment form attached to the notice to a bank or other financial institutions to make the necessary payments. This system is applicable mainly to local taxes including individual inhabitants' tax, individual enterprise tax, fixed asset tax, real estate acquisition tax, and automobile tax.
  3. Special collection

    Pension payers and salary payers pay certain taxes on behalf of the taxpayers by deducting the corresponding amount from the payment they make to the concerned taxpayers. Taxpayers do not need to calculate, file, or make a payment for taxes applicable to this system. The special collection system is mainly applied to national income tax and local inhabitants' tax.
  4. Tax stamps

    Taxpayers pay applicable taxes by affixing appropriate tax stamps such as certificate stamps (shoshi) and documentary stamps (inshi). Document-related stamp tax and automobile tax (part) are among those paid by these tax stamps.
    The TMG abolished certificate stamps in April 2010, and tax payment is required to be made in cash.
Payment of tax

Each tax payment has to be made by a designated deadline. If you miss the payment deadline, you may be subject to a penalty charge according to the length of overdue period. The payment can be made at various financial institutes or convenience stores. You may arrange in advance an automatic payment deduction from your bank account. Contact your local tax office, metropolitan tax office, or city hall for details regarding how to pay tax.

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