All income earners in Japan, residents and non-residents alike, are required to pay income tax, which is a national tax. As the filing of income tax return starts in two weeks, this month’s topic is income tax and tax returns. Your 2011 income tax will be levied on your earnings from January 1 to December 31, i.e. the amount of your total earnings minus deductions from income and multiplied by the appropriate tax rate.
The period for receiving filing assistance from the tax office is from Thursday, February 16 to Thursday, March 15, 2012. For specific time, date, and venue of filing your tax return, please ask your nearest tax office (PDF/18KB). They are closed on weekends, but on Feb. 19(Sun.) and 26(Sun.), tax filing venues (not the tax offices) in Maebashi and Takasaki will be open for both filing and receiving assistance. You can also file your tax return from your PC at home by e-Tax.
Income tax is calculated and paid by employers by way of withholding income tax from employees’ monthly pay and bonuses and then filing a year-end adjustment. Any deficits that resulted from withholding an earner’s income tax after deductions for the year will be refunded.
All employed residents are required to file a tax return if any of the followings apply:
- Your total income from employment exceeded JPY20,000,000 in 2011.
- You received salaries, etc. from one source only, and your total amount of various types of income (excluding employment and retirement income) exceeded JPY200,000.
- You received employment income from two or more sources, and the total amount of earnings from employment, etc. not subject to the year-end adjustment or withholding tax and various types of income (excluding employment income and retirement income) exceeded JPY200,000.
Tax Refunds Available by Filing
Even when a person is not legally required to file a final return, if a person has overpaid as a result of taxes withheld at the source or through the prepayment of estimated taxes, a tax refund can be claimed by filing a return for the sake of a refund (refund returns). Because such refund returns can be filed prior to February 16, it is recommended that these returns be filed as early as possible. The following persons are advised to see if they are qualified for refund return.
- You bought a home by mortgage.
- You paid a large amount of money for medical expenses.
- You suffered from theft or natural disasters.
- Your employment was terminated before the end of 2011, and you were not reemployed during the remaining period of the year.
- You are eligible for any special tax deductions. There have been deduction revisions that apply to your 2011 income tax. Here are some details on the changes, but please contact your nearest tax office to find out about how they will affect your filing.
For more details on revisions that apply to your 2011 income tax, please read Pages 12 and 13 of 2011 INCOME TAX GUIDE FOR FOREIGNERS (PDF/4.3MB) compiled by the National Tax Agency.
- The exemption for dependents under the age of 16 years has been discontinued.
- The definition of “specific dependent qualified for exemption”. The amount of exemption (JPY630,000) was amended to cover dependents 19 years or older but younger than 23 years of age (formerly, 16 years or older but younger than 23 years of age).
- In addition to the aforementioned exemption revision: in cases where an eligible spouse or dependent family member is a person with a special disability who lives in the same domicile, in place of adding JPY350,000 to the exemption amount of the spouse/dependent, the amount of the “exemption for the disabled” for a person with a special disability who lives in the same domicile has been raised to JPY750,000 (formerly JPY400,000).
Note that owners of a private business such as independent enterprises of commerce, industry, fisheries, agriculture, and independent personal services, etc. are also required to file a tax return.
Here are some useful website addresses in English and Japanese.
National Tax Agency (Kokuzeicho)
FY2012 Tax Reform (Main Points) by Ministry of Finance (PDF/56KB)
Comprehensive Handbook of Japanese Taxes 2010(Latest Edition) by Ministry of Finance
(Effective January 2012)