How income tax works in Japan

Income tax in Japan is calculated on income obtained from January 1st to December 31st

Income tax in Japan can be collected in two ways, one by the employer who deducts the amount from the monthly salary. This means the deduction at source. The second way is for those who are self-employed or there is no withholding tax, i.e. the calculation of income tax and the submission of this information and payment must be done by the taxpayer.

For salaried workers, with tax deducted at source, i.e. directly from their pay stub – this system is known as Gensen Chosu (withholding tax). The tax declaration is done by filling out the document Nenmatsu Chosei (year-end tax adjustment) given by the company where you work. The purpose of this adjustment is to check whether there is any difference between the total amount collected at the time of salary payment and the actual amount of tax to be paid for the year.  

For more information consult your company’s Human Resources department, if not possible, please contact the various Japanese Federal Revenue offices throughout Japan.

In the case of self-employed workers, the income tax return, the Kakutei Shinkoku, must be filed between February 16th and March 15th of the following year. See below the case in which people are required to declare.

  • Those who work for a company that has not made the year-end tax adjustment (nenmatsu chosei).
  • For those who received wages from two or more companies in the year.
  • In the case of increasing the number of dependents. 
  • For those who make financial remittances to relatives abroad who have no income of their own.
  • People who are enrolled in the National Health Insurance(Kokumin Kenko Hoken)and can provide proof of expenses between January  and December.
  • High medical expense (when it exceeds 100,000 yen per year or other)

See on the Japanese Federal Revenue website how to make the Kakutei Shinkoku


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