Expatriate tax ebook - Japan
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
Expatriates who require a work visa must apply for this before taking up employment in Japan. It is, therefore, important that the expatriate’s employment contract and benefit package is structured tax efficiently before starting work in Japan.
Employment visas
To speed up the visa process, prior to submitting their visa application, the employer or sponsor should obtain a certificate of eligibility to enter Japan from the Immigration Bureau in advance. If an expatriate’s spouse and/or dependents relocate to Japan they will require dependent visas. An expatriate’s spouse is able to work in Japan; however they must apply for the appropriate visa.
Tax year
The tax year in Japan is 1 January to 31 December.
Tax returns and compliance
15 March (if it falls on a holiday, then the first business day following) is the due date. No extensions are granted, and a 5% penalty is levied on returns filed after the due date and interest is levied on tax owing if it is paid after the due date.
|
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
Japan’s local inhabitant tax is levied on individuals who reside in Japan as of 1 January of the current year, and who earned income in Japan during the preceding year. The tax rate is a flat 10%.
Sample income tax calculation
| ¥ | |
|---|---|
| Income | |
| Employment income before deduction | 28,592,111 |
|
(3,129,606) |
| Employment income | 25,462,505 |
| Total taxable income | 25,462,505 |
| Deductions | |
|
380,000 |
| Total Deduction from income | (380,000) |
| Net taxable income | 25,082,000 |
| Tax | |
| National income tax | 7,236,800 |
| Witdholding tax of salary | 6,225,127 |
| Interim tax | 1,284,200 |
| Tax due (refund) | (272,600) |
Information about Japan:
Last updated 19 March 2008
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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Contact us
For further information on expatriate tax services in Japan please contact Eric Keuling.