photo credit: ANATOLI AXELROD
For those of us who have ever taken a trip to the tax office, forms in hand, preparing for the headaches and grinding teeth and shuffling through the mounds of paperwork we are carrying, heading to the tax office in order to adjust your taxes feels like heading to the dentist for a root canal. It makes it worse if you are living in Japan and don’t speak Japanese. It can be intimidating, and even finding time to get down to the tax office can be a hassle. Here is a short guide to tax adjustments in Japan, which will hopefully ease the pain in your wallet, and your brain. Keep in mind, it would be far too annoying and tedious to get into corporate taxes, so these pointers are meant for your average gaijin on the street.
What sort of taxpayer are you?
I don’t mean if you are a diligent taxpayer or a lazy shmuck (like me), I mean you need to know if you are a.) a Resident, someone who has had their address – Jusho 住所 – in Japan continuously for more than one year; b.) a Non-Permanent Resident, someone who doesn’t plan on staying in Japan and becoming a naturalized citizen, but someone who has had an address (not the same one, necessarily) in Japan for more than five years; c.) a Permanent Resident, someone who intends to stay in Japan, and has had an Japanese address continuously for five years. If you have been here for five years straight, you will likely automatically be a PR; d.) a Non-Resident – someone who has not had a Japanese address for more than one year continuously.
What do you pay taxes on?
Essentially everything you earn is taxable if the company/individual who hired you issued a government-approved check or pay-stub. Income from domestic sources (paid domestically or abroad), and income from sources outside Japan (again, paid in Japan or not), is generally all taxable, so please get copies of all your pay stubs, or at least an income statement from your employers. The only people excluded from taxes would be Non-Residents (the noobies), who have received income from abroad. You should receive a Gensenchoushuuhyou (源泉徴収票), which helps the tax officers track your income and which helps ensure you won’t be subject to penalties if you are miscalculating your income (intentionally or not). So, make sure you get one from every employer, and if you received income from abroad, make sure you get the equivalent of this income statement to give to the tax bureau.
When should you file your taxes, and what about (gulp) penalties?
For penalties – do not incur them! If you don’t file a correct tax return, you will be charged a delinquent tax as well as additional taxes to cover what you did not file. So, it’s very important to get all your employers from the last tax year to get you that Gensenchoushuuhyou.
Taxes should be filed from February 16 to March 15.
So, this should give you a bit of a head start on this tax business. Please make sure you get your forms in order, get a Japanese speaking friend to come with you if you think you will need to ask questions or be asked questions, and relax! Lucky for us foreigners, like native Japanese tax season comes but once a year.
