The Japanese Tax season is once again upon us. It’s a wonderful time of year where we all flock to the local tax office, line up, and then let a little man in a suit who doesn’t understand a word of what we say (and vice-versa) write down our life’s financial worth on a series of complex, incomprehensible documents. Don’t bother trying to get a clear answer, because there isn’t one. And speaking the language will only remove “language barrier” from your list of reasons as to why you are still confused. Want to shed a little light exactly what goes on with our taxes here in Japan? Read on…
Firstly, what exactly are we doing? Well, that’s quite simple really. We’re calculating our income tax for the year. Your employer would have given you a tax withholding slip (”gensenchoshuhyou” in Japanese), detailing your total income for the year, withholding tax, and social insurance contribution if you were enrolled. What that little man in a suit at the tax office helps(?) you calculate is your actual tax, and how much it differs from the amount of tax which has already been withheld. If you have withheld more than you owe, then you should get some sort of refund. If you owe more than you have withheld, then you need to cough up the difference.
So, how do all those calculations work? For most, our income is derived purely from employment, hence “employment earnings”. From this, we have a deduction from earnings, given in the form of a simple calculation, leaving us with a slightly smaller figure, our “amount of income”. We then deduct things such as health insurance payments, dependent and spouse deductions, and of course the 380,000yen basic deduction which is just applied to everyone in general. This results in our taxable income. From this, expect the amount of tax to be about 5%-20%. Then we compare this with your withholding tax amount. Hopefully, your withholding tax amount is higher and you get a small refund.
Now, many of you have heard about “deducting expenses” such as rent or phone bills, or “claiming it on tax”. Unfortunately, however, this is only possible in the case of having “business earnings (sales, etc.)”, and not purely “employment earnings”. Business earnings are earnings derived from commerce, industries, independent business and so on. So unless you have derived some income from your independent work, don’t expect to be “deducting your new laptop” in a hurry. For those of you who do have independent business earnings, there are English examples and guides available at www.GaijinTax.Com. There is also information for foreigners, in English, on the National Tax Agency’s Foreigner Information website , and you can find your local tax office through the National Tax Agency Map section (Japanese only).
The dates for submitting your taxes in 2009 without penalty are Feb 16th through March 16th, and should be done at the local tax office of where you are currently registered.
