Expatriate tax ebook - Japan

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Facts and figures

Pre arrival procedures
Employment visas
Tax year
Tax returns and compliance
Income tax rates
Local inhabitant tax rate
Sample income tax calculation

Pre arrival procedures
It is important that the expatriate’s employment contract and benefit package are structured in a tax efficient manner before commencing work in Japan.

Employment visas
To quicken the visa process, prior to submitting their visa application, the employer or sponsor should obtain in advance a certificate of eligibility to enter Japan from the Immigration Bureau. If an expatriate’s spouse and/or dependents relocate to Japan they will require dependent visas. If the expatriate’s spouse also intends to work in Japan, they also must obtain the appropriate visa.

Tax year
The tax year in Japan for individual taxpayers is from January 1 to December 31.

Tax returns and compliance
Tax returns and payments must be made by March 15th (if March 15th is a holiday, then the first business day following). Extensions are not available. A flat 5% penalty is levied on the total tax amount for any tax returns filed after the due date, in addition to an annual interest charge on any tax owing.

Income tax rates

National tax rates
1 - 1,950,000 5%
1,950,000 - 3,300,000 10%
3,300,000 - 6,950,000 20%
6,950,000 - 9,000,000 23%
9,000,000 - 18,000,000 33%
Over 18,000,000 40%

Local inhabitant tax rate
In addition to national income tax, Japan’s local inhabitant tax for a given tax year is levied on individuals who reside in Japan as of January 1 of the following year. The tax rate is a flat 10% of the taxable income amount as reported on the tax return.

Sample income tax calculation

¥
Income
Employment income before deduction 28,592,111

Standard deduction

 (3,129,606)
Employment income 25,462,505
Total taxable income 25,462,505
Deductions

Basic deduction

 380,000
Total Deduction from income (380,000)
Net taxable income 25,082,000
National income tax due 7,236,800

 

Information about Japan:

  • introduction
  • facts and figures
  • basis of taxation
  • what taxes?
  • tax planning opportunities


    • Last updated 20 June 2011

    This information has been provided by Grant Thornton Japan, a member firm within Grant Thornton International Ltd, and is for informational purposes only. Neither Grant Thornton Japan nor Grant Thornton International Ltd can guarantee the accuracy, timeliness or completeness of the data contained herein. As such, you should not act on the information without first seeking professional tax advice.

    Grant Thornton International Ltd and the member firms are not a worldwide partnership. Services are delivered independently by the member firms.
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    For further information on expatriate tax services in Japan please contact Joseph Daniels or Soichi Hirose.

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