Have you ever wondered how to declare or refund income tax in Japan? In this article, we will explain how income tax is done for residents of Japan. In Japan, the income declaration is called Kakutei Shinkoku [確定申告].
In Japan, the income tax declaration period usually lasts until mid-March. For those who work for companies that do the 年末調整, it is not necessary to file an income tax declaration unless they want to add additional 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.
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Who should file income tax in Japan?
Those who fall into one of the situations below must file the income tax kakutei shinkoku:
- 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 (Kokumin Kenko Hoken);
- 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;
In other words, those who receive salary from more than two companies need to declare the kakutei shinkoku. Some who participate in part-time jobs (arubaito) also fall under this by 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.
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
Employees who work for companies usually have their income tax deducted from their salaries every month. This is called "Gensen Choshu" (withholding tax). This is good because it eliminates the need for annual declarations.
At the end of the year, the process called "Nenmatsu Chosei" (year-end tax adjustment) is carried out, calculating the difference between the total amount of tax withheld at source and the annual tax amount, which is calculated based on the salary amount for 1 year.
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:
- Gensen choshuhyo - Provided by the hiring company;
- Foreign registration (Zairyu Card) or passport;
- Marriage and birth certificates (for dependents);
- Bank booklet (for the credit of refunds, if any);
- Personal seal (inkan);
- Proof of remittances abroad (if any)
- All medical expense receipts for the year (if any);
- Dependent's documents;
- Documents relating to national health insurance tax
- 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.
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