Ultimate Guide to Surviving the Tax Return in Japan
By Kyle Jumara | February 21, 2023
With the start of a new year comes everyone’s favorite time… tax season, or more specifically time to file your Tax Return in Japan! In all seriousness filing taxes in your own country is often complex in and of itself, many who file their taxes feel as though they are not doing something correctly or missing something. When living in a foreign country filing your taxes can be so daunting to the point where it might make you question “why should I file a tax return”? This article will serve as an all-inclusive guide to what is needed to file your tax return in japan and a step-by-step guide to do so.
This article is a subsection of our extensive series on Guide to Full Time Jobs in Japan.
Why Should I File a Tax Return in Japan?
Why Should I File a Tax Return?
Let’s start with the first question, should I even bother filing my tax return in Japan? Although you may or may not need to file a tax return it will probably be in your best interest to do so. The majority of foreigners moving to japan and having to file a tax return for the first time (and the next time next year) will most likely get money back from the government. And in reality, you may find that the process is not too complicated if you have all your necessary documents, the actual process is quite simple, some may even say fun, maybe!
Tax returns are filed the following year by March 15th, for example, if you worked in 2022 then on March 15th, 2023 you will need to file your tax return by then. Depending on other circumstances the time you have to file your taxes may be extended. One such example is because of the Corona Virus the due date to have your taxes submitted was extended. However, do remember the earlier you file your return the earlier you can receive your refund. One more thing to note is that you may be penalized a certain percentage for filing your tax return late, your tax refund will be reduced by 15-20 percent when you receive it.
Want to know more about Money and how to get a Credit card in Japan? Also check out on BFF Tokyo:
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Do I Need to File a Tax Return in Japan?
You may be wondering as well “Do I actually need to file a tax return?” Let’s look at the following situations so you can see where you stand.
Yes If...
You are living in Japan and have a fixed address either as a non-resident or non-permanent resident and are receiving income from Japan. If you are a permanent resident in Japan, however, the previous two situations apply to having to pay taxes on Japanese income as well as anything you make abroad.
These three categories are not at all related to your type of visa, for example, if you have a teacher's visa vs engineering, etc. Also if you are working as a freelancer you will need to file your own tax return because of the nature of having several different companies and multiple tax slips your employers are likely not going to be willing to file it for you.
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No If...
None of the following conditions are met:
- You are leaving Japan before the end of the tax year,
- Your employer did not withhold your taxes,
- If you have more than one employer
- If your annual income is less than 20 Million yen or your part-time income is less than 2 million yen.
Also note that many employers will actually file your taxes for you based on how much money they paid you, how much was taken from various taxes, and with an approximation of how much you spent in expenses like stated before if you are working as a freelancer than the burden of filing your tax return will most likely be on you.
Optional If...
If you don’t meet any of the above conditions in the “No, if…” category you still may want to file a tax return as you will probably still get some money back. Also, it may be worth doing yourself even if your company offers to do so as you may have extra expenses you want to claim. Of course, if you only started working late into the year and don’t want to bother filing your Japanese tax return in this situation it may not be worth your time or effort. If you aren’t sure, it is recommended that you seek professional advice.
Must Know Vocabulary for your Tax Return in Japan
Vocab!
Below you will find a list of essential Japanese words, their readings and the translation you will come across while preparing your taxes or when filing them. Use these words to help you fill out your tax documents, as without them the process will be extremely difficult. Many difficult words that you may not be familiar with will come up either while talking to staff at your ward tax office or on the form itself.
|
Japanese |
Romaji |
English |
|
税 [ぜい] |
Zei |
Tax |
|
国税 [こく ぜい] |
Koku zei |
National tax |
|
住民税 [じゅうみん ぜい] |
Jyuumin zei |
Resident’s tax |
|
所得税 [しょとくぜい] |
Sho toku zei |
Income tax |
|
給与 [きゅうよ] |
Kyūyo |
Salary |
|
給与所得 [きゅうよ しょとく] |
Kyūyo shotoku |
Employment income |
|
控除 [こうじょ] |
koujyo |
Deduction |
|
源泉徴収 [げんせん ちょう しゅう] |
gensen-chou-shuu |
Tax withheld from salary |
|
支払金額 [し はらい きんがく] |
shi-harai-kingaku |
Gross salary |
|
源泉所得税 [げん しょとく ぜい] |
gensen-shotoku-zei |
Source of income |
|
生命保険料 [せいめい ほけん りょう] |
seimei-hoken-ryou |
Life insurance |
|
地震保険料 [じしん ほけん りょう] |
jishin-hoken-ryou |
Earthquake insurance |
|
住宅借入金等特別控除 [じゅうたく かり いれきん とう とくべつ こうじょ] |
jyuutaku-kari’irekin-tou-tokubetsu-koujyo |
Other deductions |
|
源泉徴収票 [げんせん ちょうしゅ ひょう] |
Genzenchōshū-hyō |
Withholding slip |
|
氏名 [しめい] |
shimei |
Name |
|
受給者生年月日 [じゅきゅうしゃ せいねん がっぴ] |
jukyuusya-seinen-gappi |
Birthday |
|
支払者 [しはらい しゃ] |
shiharai-sha |
Employer |
|
配偶者 [はいぐうしゃ] |
haiguusha |
Spouse |
|
扶養 [ふよう] |
fuyou |
Dependents |
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What Expenses Can I Claim When Filing a Tax Return in Japan?
List of Expenses you Can Claim on Your Japanese Tax Return
You might be surprised to find out that there are many expenses you can claim as deductions on your tax return, depending on your working environment. Keep in mind it’s best to keep receipts for all bills paid throughout the year. If you claim expenses on your filed taxes there is a good chance you will get money back here is a list of things you can declare:
Utilities: Your necessary utilities at your apartment or home including, water, gas, and electricity can all be claimed.
Rent, internet, and phone bill: Due to the fact that many people are now working from bills like your home rent, internet, and even your phone bill can be claimed. With that being said if your job requires you to go to work and not work from home you will not be able to include your rent in your deductions.
Travel, business consumables supplies, meals, and even entertainment: If your job requires that you travel, pay for business meals, buy supplies or even purchase some forms of entertainment these can also be claimed.
Health Insurance and Life Insurance: Your mandatory insurance bills that need to be paid can also be claimed, if you pay for these out of pocket rather than through your company you will need to submit proof that you paid for them.
Other: There are a few other niche deductions such as advertising if it’s for your business, packing and moving fees and maintenance fees or repairs for a vehicle that you use for work.
What to do if you don’t have proof?
If you didn’t keep all necessary receipts from your utilities or expenses you can contact your local ward office and request proof for specific bills or from the proprietary companies of the bills you are missing. Remember if you made any large purchases online you can also check your purchase history and print out receipts that way. The amount you can deduct is rather lenient, if you find that you are unsure or on the fence 50/50 about whether something can be deducted chances are they can be and you should include it on your tax return.
A Step-by-Step Guide to filing your tax return
Below is the step-by-step guide to filing your taxes, this will serve as the only guide you need to go start from the beginning of your tax filing journey till the end.
First - Gather all the documents you have
As previously mentioned, it's best to gather all your receipts from the utilities you paid for as well as any other deductions you will be claiming. You will also need the sheet from your employer that tells you how much you made as well as how much was deducted throughout the year in taxes, this statement is called a Gensen Choshu Hyo or 源泉徴収票. You will also need your inkan and your residence card when filing the forms in most cases.
The necessary documents and items you need to have are the following
-
Tax statement from your company(s) / Gensen Choshu Hyo / 源泉徴収票
-
Your Inkan (seal) *NOTE if you do not have an Inkan you can simply sign your name as well.
-
Any receipts or bill statements
-
Photocopy of your residence card, insurance card of bank book, in some cases the staff may ask for these
Second - Get the form and fill it out and turn it in
Getting Started - In order to submit and fill out your tax return you will need to obtain the forms themselves, the form consists of carbon copy duplicates, the second sheet will be yours and the first one gets submitted to the tax office. You can either file the forms in person on the spot or take them home, fill them out at your leisure, and bring them in. The staff members at the office may be able to help you if you have all of your necessary information at the ready.
Also, note that while it is possible to file your taxes online the process may require that you have a My Number card as well as having an advanced understanding of Japanese. Similarly, you can also fill out the necessary tax forms and simply mail them to your tax office however again you will need to make sure that everything you file is 100% correct. We feel that going to the tax office and filing the form face-to-face is the best way to do so. Below you will find a copy of the Japanese form with an English Translation over the matching cell.
Questions About Insurance?
Need more information about different insurance in Japan? Click on our Guide to Health Insurance in Japan article to learn more.
Follow this link to a breakdown of each text field as well as the explanation/ translation of each required box.
Last - Await for your tax refund to arrive
It will take a few months to receive your refund so please be patient. Again the quicker you file your tax before the deadline the quicker you will get your money. Most people who file their taxes get their refund within a few months.
HELP! I realized I Made a Mistake. Can I Fix it?
I filed my taxes myself before but I think I made a mistake!
If you previously have filed a tax return and believe that later you may have made a mistake it is best to talk to the staff at your local tax office. This is again a good reason to have someone at the tax office look over your tax return and assist you before filing it. Also, you can request a correction to the tax return, this correction can be filed within 5 years of filing the original tax return.
Received a huge bill!
If you believe that there is a mistake and you received a bill in the mail with an astronomical amount that needs to be paid back it’s best to go to either your tax office or ward office (depending on where the bill is addressed from) to ask them for assistance. In the event that you do have to pay rather than get a refund, there are a few ways in which you can go about paying off the bill. One payment method is you can of course pay all of it at once by taking the bill to a convenience store and paying there in cash. To pay the amount in cash you will receive a bill through the mail similar to your utility bill and have a due date when you must pay by. The government also allows you to pay in installments as well if the amount is too high for you to pay all at once. When paying in installments you can pay a little at a time at convenience stores the same way you pay the lump sum (just a lower amount of course) but the government also allows you to pay via credit card.
Am I going to get audited?
A tax return can be audited up to 5 years from when the tax return was filed, this process is done through the National Tax Office. Half of the individuals who have been audited came from those who filed a tax return with a large amount of expenses. Also, keep in mind that the maximum you can deduct from your taxes caps off at 1.95 million yen while the minimum is 550,000 yen anyway, so if you paid more than this you cannot deduct it. The standard deduction maximum does not include deductions for insurances (life, health, and earthquake), charitable donations or losses.
Must-Know Phrases for Communicating at the Tax Office
|
Japanese |
Romaji |
English |
|
税金を申告したいです |
Zeikin o shinkoku shitai desu |
I want to file my 2022 taxes |
|
これでいいですか？ |
Kore de ii desuka? |
Is this correct? |
| 助(たす)けてください | Tasukete kudasai | Can you please help me? |
| お金(かね)を受(う)け取(ろ)りますか？ | Okane o uketorimasu ka? | Will I receive money? |
| お金(かね)を借(か)りていますか？ | Okane o karite imasuka? | Do I owe money? |
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FAQs
The following are some FAQs that you may be wondering about a few of the answers were covered in the above section but here is a quick resource.
What are the Types of Income Taxes in Japan?
(Non-resident, non-permanent resident, permanent resident) Below we will break down the similarities and differences between all three.
Non-Residents pay taxes only on their income from Japanese sources, but not on income made abroad. A Non-Resident is anyone who has lived in Japan for less than one year and someone without a home/apartment in Japan.
Non-Permanent Residents are people who have lived in Japan for less than five years but do not intend to live in Japan permanently. Non-Permanent Residents must file a tax return in Japan on all the income they make in Japan.
Lastly, a Permanent Resident is a person who has been living in Japan for at least 5 years and is intending on staying in Japan permanently and must pay taxes on all of their income made in Japan and abroad again on their Japanese tax return.
When do I need to file it?
You will need to file before March 15th, otherwise, you will have 15-20 percent in penalty fees taken from your return.
Where do I submit my tax return?
Follow this link to all of the tax offices in Tokyo, however, it may be easier to simply do a search of your ward or city and “tax office” Check their website to find out whether you need to make a reservation or if you can just walk in.
I made money overseas, do I need to report it?
If you are making more than 50 million yen a year overseas then you will need to report it on your Japanese tax return form, otherwise, you do not need to report it. However, keep in mind your home country may require you to file a tax return separately for that country.
Is there a Japanese Tax Calculator to calculate what I will owe or what I will receive?
This is really dependent on how much you spent in taxes throughout the year as well as what your deductible expenses are. The staff at the tax office will be able to better answer this. There also is an online calculator you can use, Follow this link to the online calculator.
What happens if I don’t file my tax return on time or at all?
If you file your tax return late your total tax refund will be reduced by 15- 20 percent and if you do not file a tax return at all you will most likely receive a letter in the mail requiring you to fill in information about your previous years' earnings.
How do I get my tax information from my company?
In most cases your employers knows that tax season is coming and should already have this information at the ready, if however they have not mailed your tax information either by snail mail or email make sure to contact them asap.
Do I need to file my tax return or will my company do it?
Your company will best be able to answer this, check your contract or ask someone at your company to verify whether they will file your tax return or not.
What documents should I keep for my tax return?
In general, you want to keep as many documents as possible throughout the year, most important things like, utility bills, insurance bills, and receipts from anything you are claiming, you may also be asked to supply a photocopy of your bank book as further proof of your income.
Is there a translated tax form I can look for reference?
There is!, Of course, use this form as a guide as you will still need to submit a form in Japanese. Please reference and follow this link to pages 69 and 70 on this pdf.
When do I get my money back?
In general, the earlier you submit your form the earlier you get your refund back. In some cases, it can be as quickly as two weeks.
Final Thoughts
We at BFF Tokyo wish you the best of luck when preparing and filing your tax return in Japan. We recommend that going forward always keep track of all of your receipts and bills to make the process that much smoother the next year.
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