|
Income
tax and inhabitants' tax are levied on an individual's income.
Income
tax
Self-assessment
system
An
individual who has taxable income must compute his/her income
earned from January to December every year, and his/her tax
liability, and pay the tax. However, those employment income
earners whose annual income from one source is not more than
20,000,000 and whose income from secondary sources is not more
than 200,000 are not required to file final returns because
their employers are required to with hold tax from wages and
make the the year-end adjustments.
Accordingly, taxpayers other than those employment income
earners mentioned above must compute their income (mainly,
wages or salaries), file final returns with the tax office and
pay their tax liability. The period for filing the final
return for income tax is from February 16 to March 15 of the
following year in which the income was received.
Classification
of individual taxpayers
Taxes
are imposed on individuals according to their residential
status. Residential status is classified under the following
categories.
Resident
A
person who has an address (domicile) in Japan and has resided
continuously in Japan for one year or more is regarded as a
"resident".
Note: If a person enters Japan as an employment income earner
with the intention to reside in Japan, he/she is presumed to
be a "resident" immediately after the entry into
Japan unless his/her stay in Japan is obviously recognized as
being for not more than one year.
Non-permanent
Resident
A
person who has no intention of living permanently in Japan and
who has had an address (domicile) or residence in Japan
continuously for not more than five years is regarded as a
"non-permanent resident"
Permanent
Resident
All
resident other than non-permanent residents are permanent
residents.
Nonresident
All
individuals who are not residents are nonresidents.
Withholding
income tax system
If
an individual receives certain kinds of income, income tax is
withheld at the source.
A person who makes specific types of payment to an individual must
withhold income tax at the source and pay it to the tax office. The
withholding rate for income tax is set according to the type of
income.
The most typical examples of income subject to income tax
withholding are employment income, interest income, dividend income
and certain other kinds of remuneration.
The withholding income tax rate applied to a nonresident is 20“.
If a nonresident transfers his/her real estate, 10“ of the
transfer price is withheld.
Blue
form return
A
person who esrns income from real estate, business or timber may
file a blue form return after obtaining approval from the tax
office. A blue form return tax payer is granted privileges in the
calculation of income and in taxation procedures. Those who file
blue form return must keep necessary books and accurate records of
all transactions.
Inhabitants
tax
The
municipalities (cities. wards, towns and villages) compute tax
liability for each taxpayer on the basis of his/her income in the
previous year.
Nonresident is not subject to inhabitants tax.
|
Other
Taxes on Individuals
|
Gift
tax
A
person who acquired property by gift during a year must file a
return and pay gift tax during the period from February 1 to March
15 of the following year.
A
Inheritance tax
A
person who acquired property by inheritance or bequest must file a
return and pay inheritance tax, within ten months after the date of
inheritance.
B
Consumption tax
Taxpayers
of consumption tax are business enterprises that sell goods, lease
assets and provide services in Japan. Amounts of consumption tax are
added on (shifted) to the prices of goods and services. Therefore,
ultimately the tax is borne by consumers.
Imported products are taxable, but exported products are exempted
from taxation.
The amount of consumption tax to be paid is the net of consumption
tax received minus that paid by economic transactons during the
accounting period.
The due date for filing a return and for the tax payment is, in
principle, the end of March of the year following the year of the
sale, lease, or provision of services.
C
Land value tax
A
person who owns land in Japan which exceeds a certain amount of
value must pay land value tax.
D
Registration and license tax
A
person who registers the transfer or preservation ownership of land
or a building with the government registration office must pay
registration and license tax.
E
Stamp tax
Person
who signs certain certifrcates of acquisition/forfeiture, change or
lapse of a property right must pay stamp tax.
F
Property tax
A
person who owns real property or any depreciable assets for business
must pay property tax to the municipality.
G
Individual enterprise tax
A
person who operates a business must pay individual enterprise tax to
the prefecture, the amount of which is computed on the basis of
income.
H
Real property acquisition tax
A
person who acquires land or a building must pay real property
acquisition tax.
Under
the estimated tax prepayment system, certain tax payers are required
to make advance payment for the given year on the basis of the
amount of income tax paid in the previous year. Such a taxpayer pays
one-third of the income tax which he/she paid in the previous year
on July 31 and again on November 30 in the given year.
Prepayment is required only if the amount of the income tax on the
income of the preceding year exceeds \150,000.
In
general, taxes are paid in cash. The places for payment are all post
offices, designated banks and the tax office whose jurisdiction area
covers the location of the taxpayer's address (domicile). A taxpayer
must fill out and submit a tax payment slip when he/she pays the
tax.
|
General Section
