Tokyo Life
Taxes
*This article originally appeared on a website operated by Tokyo International Communication.
Anyone who works, lives, or does shopping in Japan pays taxes to the national government and the local area where they live. The funds collected from these taxes are used to support everyone's daily lives. There are a variety of different types of taxes, but we'll be talking about three of them in this article: "income tax," "resident tax," and "consumption tax."
Income Tax
What is income tax?
Income tax is a tax paid to the national government. People who work and earn income pay this tax. The amount due is determined by your earnings between January 1st and December 31st each year
How do you pay income tax?
There are two different methods used for paying income tax.
- People who work for companies or are employed by others
- The company deducts taxes from your salary each month and pays the national government on your behalf.
This is called gensen choshu (tax withholding). - People who have their own companies or stores or who work as freelancers
- Calculate the money earned from your work and the taxes owed for it and submit your paperwork at the tax office for the area where you live. Your taxes can be paid at a variety of locations such as convenience stores, banks, post offices, and tax offices.
This process is called kakutei shinkoku (submitting a final tax return). You are required to complete it between February 16th and March 15th of the years following those in which you worked and earned income.
If there is anything you don't understand about income tax, inquire with your local tax office.
- For information about tax offices in Tokyo, see the site below.
nta.go.jp/about/organization/tokyo/location/tokyo.htm (Japanese only) - In addition, the Tokyo Regional Taxation Bureau offers a phone number for consultations in English.
nta.go.jp/english/contact/moreinformation/
Resident Tax
What is resident tax?
Resident tax is a tax paid to the area where you live. If you live in Tokyo, this tax is paid to the Tokyo prefectural government and the local government of your municipality. Everyone living and working in Japan as of January 1st of the applicable year pays this tax. The amount due is determined based on your earnings from January 1st to December 31st of the previous year
How do you pay resident tax?
There are two different methods used for paying resident tax.
- People who work for companies or are employed by others
- The company deducts taxes from your salary each month and pays the Tokyo prefectural government and the local government of your municipality on your behalf.
This is called tokubetsu choshu (special collection of resident tax). - People who have their own companies or stores or who work as freelancers
- In June, you will receive a notification of the amount of tax due from the local government of your area. Take this to a convenience store, bank, post office, local government office or other payment facility to pay the tax.
If there is anything you don't understand about resident tax, please inquire at a local government office in your area.
Consumption Tax
What is consumption tax?
Consumption tax is paid as an additional charge when you purchase goods or pay for services. The store takes your payment and pays this tax to the national government on your behalf.
The consumption tax rate for goods and services is 10%.
However, the rate for foods and drinks you're taking home is 8% (with the exception of alcoholic beverages).
