| Taxable Income Yen | Tax Rate |
| less than 1.95 million yen | 5% of taxable income |
| 1.95 to 3.3 million yen | 10% of taxable income minus 97,500 yen |
| 3.3 to 6.95 million yen | 20% of taxable income minus 427,500 yen |
| 6.95 to 9 million yen | 23% of taxable income minus 636,000 yen |
| 9 to 18 million yen | 33% of taxable income minus 1,536,000 yen |
| 18 to 40 million yen | 40% of taxable income minus 2,796,000 yen |
| more than 40 million yen | 45% of taxable income minus 4,796,000 yen |
| Taxable Income Yen | Tax Rate |
| all | 4% |
| Taxable Income Yen |
Tax Rate |
| all | 6% |
| Taxable Income Yen | Tax Rate |
| all | 3% to 5% depending on the type of business |
Income Tax
Income tax is paid annually on income earned during
a calendar year.
For tax purposes, people living in Japan are
classified into three categories. This
categorization is not related to visa types:
Non-Resident
A person who has lived in Japan for less than one
year and does not have his primary base of living in
Japan. Non-residents pay taxes only on income from
sources in Japan, but not on income from abroad.
Non-Permanent Resident
A person who has lived in Japan for less than five
years, but has no intention of living in Japan
permanently. Non-permanent residents pay taxes on
all income except on income from abroad that does
not get sent to Japan.
Permanent Resident
A person who has either lived in Japan for at least
five years or has the intention of staying in Japan
permanently. Permanent residents pay taxes on all
income from Japan and abroad.
Note that tax treaties between Japan and more than
50 countries, including the USA, UK, Canada,
Australia, China, South Korea and most European
countries, can take precedence over the above
guidelines.
Paying taxes
Income tax in Japan is based on a self-assessment
system (a person determines the tax amount himself
or herself by filing a tax return) in combination
with a withholding tax system (taxes are subtracted
from salaries and wages and submitted by the
employer).
Thanks to the withholding tax system, most employees
in Japan do not need to file a tax return. In fact,
employees only need to file a tax return if at least
one of the following conditions is true:
if they leave Japan before the end of the tax year
if their employer does not withhold taxes (e.g.
employer outside Japan)
if they have more than one employer
if their annual income is more than 20,000,000 yen
if they have side income of more than 200,000 yen
Employees, who do not need to file a tax return,
will have their income taxes withheld from their
salaries by their employer, and an eventual
adjustment is made with the year's final salary.
People, who are required to file a tax return, such
as self-employed persons, must do so at the local
tax office (zeimusho), by mail or online (e-Tax)
between February 16 and March 15 of the following
year. The tax return for 2015 had to be filed
between February 16 and March 15, 2016.
Time to pay taxes
If not withheld by the employer, national income
taxes are due in full by March 15 of the following
year (mid April if you pay by automatic bank
transfer), with two prepayments paid in July and
November of the running tax year. Prepayments are
calculated based on the previous year's income, i.e.
you do not pay them during your first year in Japan.
For example, if you had to pay national income taxes
for 2015, they had to be fully paid by March 15,
2016 (or April 20, 2016 in case of payment by
automatic bank transfer), with the prepayments paid
in July and November 2015.
If prefectural and municipal income taxes are not
withheld by the employer, they are to be paid in
quarterly installments during the following year.
For example, the 2015 taxes are paid in four
installments in June, August and October 2016 and
January 2017.
Types of Taxes in Japan
Taxes in Japan are paid on income, property and
consumption on the national, prefectural and
municipal levels. Below is a summary of some of the
most relevant types of taxes paid by individuals:
Income Tax
Paid annually by individuals on the national,
prefectural and municipal levels. Also known as
"resident tax" on the prefectural and municipal
level. The amount is calculated based on the net
income of the individual person.
Enterprise Tax
Prefectural tax paid annually by self-employed
individuals engaged in business activities. The
amount is calculated based on the person's net
income and the type of business.
Property Tax
Municipal tax paid annually by individuals who own
land, housing and other types of depreciable assets.
Consumption Tax
Paid by consumers when they purchase goods and
services. The rate is currently 8% and is scheduled
to be increased to 10% in April 2017.
Vehicle related Taxes
A prefectural automobile tax is paid annually by
individuals who own a car, truck or bus. In case of
passenger cars, the amount is calculated based on
the engine displacement. A municipal light vehicle
tax is paid annually by individuals who own
motorbikes or other motorized light vehicles. A
national motor vehicle tonnage tax is paid by
vehicle owners at the time of the mandatory
inspections (shaken). A prefectural automobile
acquisition tax is paid by persons when they acquire
a car.
Liquor, Tobacco and Gasoline Taxes
The national liquor tax is paid by consumers when
they purchase alcoholic beverages. National,
prefectural and municipal tobacco taxes are paid by
consumers when they purchase tobacco products. A
national gasoline tax is paid by consumers when they
purchase gasoline. The liquor, tobacco and gasoline
taxes are included in the prices shown by shops.
Japan Income Tax Rate for Japan Resident Individual Tax Payers
| Taxable Income Yen | Tax Rate |
| less than 1.95 million yen | 5% of taxable income |
| 1.95 to 3.3 million yen | 10% of taxable income minus 97,500 yen |
| 3.3 to 6.95 million yen | 20% of taxable income exceeding 3.3 million yen plus 232,500 yen |
| 6.95 to 9 million yen | 23% of taxable income exceeding 6.95 million yen plus 962,500 yen |
| 9 to 18 million yen | 33% of taxable income exceeding 9 million yen plus 1,434,000 yen |
| More than 18 million yen | 40% of taxable income exceeding 18 million yen plus 4,404,000 yen |
Prefectural Income Tax Rate 4% of Taxable Income
Municipal Income Tax Rate 6% of Taxable Income
Prefectural Enterprise Tax Rates for Self employed persons 3% to 5% depending on the type of business
In
Japan Income tax is paid annually on income earned during a
calendar year.
For tax purposes, people living in Japan are classified into
three categories. This categorization is not related to visa
types:
Non-Resident
A person who has lived in Japan for less than one year and
does not have his primary base of living in Japan. Non-residents
pay taxes only on income from sources in Japan, but not on
income from abroad.
Non-Permanent Resident
A person who has lived in Japan for less than five years,
but has no intention of living in Japan permanently.
Non-permanent residents pay taxes on all income except on income
from abroad that does not get sent to Japan.
Permanent Resident
A person who has either lived in Japan for at least five years
or has the intention of staying in Japan permanently. Permanent
residents pay taxes on all income from Japan and abroad.
Note that tax treaties between Japan and more than 50 countries, including the USA, UK, Canada, Australia, China, South Korea and most European countries, can take precedence over the above guidelines.
Japan Taxation Method
Income tax in Japan is based on a self-assessment system (a
person determines the tax amount himself or herself by filing a
tax return) in combination with a withholding tax system (taxes
are subtracted from salaries and wages and submitted by the
employer).
Thanks to the withholding tax system, most employees in Japan do
not need to file a tax return. In fact, employees only need to
file a tax return if at least one of the following conditions is
true:
if they leave Japan before the end of the tax year
if their employer does not withhold taxes (e.g. employer outside
Japan)
if they have more than one employer
if their annual income is more than 20,000,000 yen
if they have side income of more than 200,000 yen
Employees, who do not need to file a tax return, will have their
national income taxes withheld from their salaries by their
employer, and an eventual adjustment is made with the year's
final salary. prefectural and municipal payments have to be paid
separately by the employee upon notification by the
municipality.
People, who are required to file a tax return, such as
self-employed persons, must do so at the local tax office (zeimusho)
between January 16 and March 15 of the following year. The tax
return for 2013 had to be filed between January 17 and March
17, 2014. Tax returns can also be filed by mail or online
(e-Tax).
If not withheld by the employer, national income taxes
are due in full by March 15 of the following year (mid
April if you pay by automatic bank transfer), with two
prepayments paid in July and November of the running tax
year. Prepayments are calculated based on the previous
year's income, i.e. you do not pay them during your
first year in Japan.
For example, if you had to pay national income taxes for
2013, they had to be fully paid by March 17, 2014 (or
April 22, 2014 in case of payment by automatic bank
transfer), with the prepayments already paid in July and
November 2013.
prefectural and municipal income taxes are paid in
quarterly installments during the following year. For
example, the 2013 taxes are paid in four installments
due in June, August and October 2014 and January 2015.
Japan Types of Taxes
Taxes in Japan are paid on income, property and consumption
on the national, prefectural and municipal levels. Below is a
summary of some of the most relevant types of taxes paid by
individuals:
Japan Income Tax
Paid annually by individuals on the national, prefectural and
municipal levels. Also known as "resident tax" on the
prefectural and municipal level. The amount is calculated based
on the net income of the individual person.
Japan Enterprise Tax
Prefectural tax paid annually by self-employed individuals
engaged in business activities. The amount is calculated based
on the person's net income and the type of business.
Japan Property Tax
Municipal tax paid annually by individuals who own land, housing
and other types of depreciable assets.
Japan Consumption Tax
Paid by consumers when they purchase goods and services. The
rate is currently 8% and is scheduled to be increased to 10% in
October 2015.
Japan Vehicle related Taxes
A prefectural automobile tax is paid annually by individuals who
own a car, truck or bus. In case of passenger cars, the amount
is calculated based on the engine displacement. A municipal
light vehicle tax is paid annually by individuals who own
motorbikes or other motorized light vehicles. A national motor
vehicle tonnage tax is paid by vehicle owners at the time of the
mandatory inspections (shaken). A prefectural automobile
acquisition tax is paid by persons when they acquire a car.
Japan Liquor, Tobacco and Gasoline Taxes
The national liquor tax is paid by consumers when they purchase
alcoholic beverages. National, prefectural and municipal tobacco
taxes are paid by consumers when they purchase tobacco products.
A national gasoline tax is paid by consumers when they purchase
gasoline. The liquor, tobacco and gasoline taxes are included in
the prices shown by shops.