Kakutei Shinkoku - Income Tax Return in Japan

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Ever wondered how to file or refund income tax in Japan? In this article, we will explain how income tax is done for residents of Japan. In Japan the tax return is called Kakutei Shinkoku [確定申告].

In Japan, the income tax return period usually runs until mid-March. For those who work in companies that do the end of year adjustment, it is not necessary to declare income tax unless you want to add information.

Where to make the declaration? City halls provide information on locations or temporary service stations, supported by staff in your language. If you know Japanese, you can file a tax return online using E-tax.

Who should file income tax in Japan?

Must declare income tax kakutei shinkoku all those who fall into any of the following situations:

  • Employees who earn an income above 20,000,000 yen;
  • Salaried workers who did not make year-end adjustment;
  • Self-employed (income and expenses statement);
  • Who wants to change values (more than one source of income);
  • Who wants to make changes to the content of deductions (dependents);
  • Persons enrolled in the National Health Insurance (National Health Insurance);
  • If the number of dependents increased;
  • If you spend more than 100,000 yen on medical expenses;
  • If you make remittances to family members abroad who have no income;

That is, those who receive salary from more than two companies must declare the kakutei shinkoku. Some who participate in part-time jobs (arubaito) also fit for receiving more than one source of income.

If the person stops working in the middle of the previous year and changes companies, he also needs to declare. Those who have spent up to 100,000 yen per family on medical expenses are not required to declare this amount.

Kakutei shinkoku - income tax return in japan

Not always people with dependents, or who took out loans or real estate financing need to declare income tax. Remembering that a dependent should not receive more than 380,000 yen per year.

It is possible to send money abroad and place the recipient as a dependent, but this requires the dependent's documentation. It is best to check with the city hall for all the details about the Japanese income tax return, which may change annually.

Gensen Tyoushuu – Withholding Tax and Year End Adjustment

Taxpayers who work in companies usually have income tax deducted from their salaries, monthly. This is called "Gensen Choshu" (withdrawal at source). This is good, because it takes away the need for annual declarations.

At the end of the year, the process called "Nenmatsu Chosei" (year-end tax adjustment), calculating the difference between the total amount of withholding tax, and the annual tax amount, which is calculated on the amount of 1 year's salary.

This adjustment is calculated and the employer passes all details and information to the employee in the months of December and January in order to correctly adjust the excess or missing amount. Keep all the information you receive.

Those who have dependents can include them in the withholding tax, eliminating the need to update their annual income tax. Remembering that the lack of dependents can make the tax more expensive.

What do you need to declare Kakutei Shinkoku?

Before filing Kakutei Shinkoku income tax, you need to make sure you have the following documents:

  1. Gensen choshuhyo - Provided by the hiring company;
  2. Foreigner registration (Zairyu Card) or passport;
  3. Marriage and birth certificates (for dependents);
  4. Bank passbook (for credit of returns, if any);
  5. Personal stamp ( inkan );
  6. Proof of remittances abroad (if any)
  7. All medical expense receipts for the year (if any);
  8. Dependent's documents;
  9. Documents relating to national health insurance tax
  10. Retirement or private insurance documents;

Now just go to the indicated place and present all the documents and follow the steps along with the support to make your statement. Otherwise, you can leave everything to an accountant.

Hope you enjoyed these tips. If you liked the article, share it and leave your comments.

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