Inhabitant Taxes in Japan

February 18, 2018

Today we will be addressing FAQs concerning inhabitant taxes in Japan.

Q : Who is liable to pay inhabitant or residence tax?

A : Inhabitant (or residence) taxes are paid in Japan only if you are a resident*. Nonresidents don’t need to pay this tax.

*You don’t need to pay residence taxes if you are a resident in Japan for less than one calendar year.

Q : How is residence taxes calculated?

A : The residence taxes are paid based on your previous calendar year income, so you don’t need to pay it if you were a resident in Japan for less than a year. Residence taxes are deducted from the taxable income starting from June. Thus the residence tax paid for the income of 2013 should be withhold from your salary every month from June 2014 to May 2015. The residence tax levied to the municipal office is about 10% of your previous year taxable income.

Q : Do I have to pay residence tax by myself?

A : Usually Japanese companies withhold part of your salary for paying residence taxes, but if they don’t pay taxes on your behalf, you are obliged to pay it by yourself.

Q : How am I supposed to pay residence taxes?

A : You need to fill in a special form called Shiminzeika (市民税課) and bring it to your municipal office’s tax department. (you can get the form in your prefectural or municipal office)