Paying Taxes

People who live, work, or shop in Japan pay taxes to the national and/or local authorities. Foreigners in Japan are also required to pay taxes.

Taxes are used to support our daily lives. Here, we’ll introduce three major types of taxes.

 

• Income Tax
• Resident Tax
• Consumption Tax

 

Income tax is a tax you pay when you earn income.
When you work for a company or similar institution, your employer deducts income tax from your paycheck and pays it on your behalf (withholding tax).
When you run businesses or shops, you calculate your own income tax. Then, between February and March, submit the necessary documents to your local tax office and pay the tax (file your tax return).
If you have any questions, please contact your local tax office.

 

Resident tax is a tax you pay to the municipality where you live.
People who have a residential address in Japan and are employed as of January 1 are required to pay.
When you work for a company or similar institution, your employer deducts resident tax from your salary and pays it on your behalf.
When you run businesses or shops, your local authorities send you a letter. Then, you pay your resident tax as instructed in the letter.
If you have any questions, please contact your local city office.

 

The consumption tax is a tax you pay to a retailer when you make a purchase or receive a service.
The current consumption tax is 10% of the price of goods and services. Takeout food and drinks (excluding alcohol) are taxed at 8%.