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アフィリエイト広告 Relocation

Don't Overlook Resident Tax: Its Importance for Expats in Japan

You've made a big move to Japan, a journey that probably included getting an education degree, gaining work experience, and saving money. Think back to when you left your old life to start anew in Japan, working to get a work permit.

It's impressive that you're in Japan for work, not just as a tourist. Your hard work to make this happen deserves respect. Some people might feel uneasy about the skills you bring, but it's important to focus on the positive. Your skills and versatility are an asset and can motivate others.

But remember, all your achievements can disappear quickly if you lose your resident card. So, make sure you keep up with your responsibilities!

Now, let's talk about what Resident Tax means in Japan.

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Understanding Resident Tax in Japan

Resident tax in Japan is a tax you pay to the local city office for living in Japan. This tax isn't based just on the income you earned from January 1st to December 31st of the previous year. Instead, it's calculated based on different factors. It's important for everyone living in Japan, including foreigners, to understand how this tax works.

In Japan, residents and foreigners have the same steps for paying resident tax, though the forms might look different. You need to file tax returns four times a year, usually in June, August, October, and January.

A key point to remember is that if you don't pay your resident tax on time, you might have problems when it's time to renew your foreign residency (Starting from February 2024, the Japanese government addresses consideration for amending new law, to revoke the permanent residency status of foreign nationals who fail to pay taxes and social security premiums (Asahi Shimbun)) So, it's vital to know about your resident tax duties and make sure you pay on time to keep your legal status in Japan.

Two Methods for Paying Resident Tax in Japan

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If you work for a company in Japan, they will handle your resident tax payments. This means they'll deduct the tax from your salary and deal with all the paperwork. This process, known as salary deduction or special collection, is common for employees. If your company does this, you don't need to pay the tax directly to the city office.

But if you're not working for a company, you have to pay the tax yourself. This is called direct payment. Every year around June, you'll get a tax payment notice from your local government. You have to pay the amount on this notice at a bank or other financial institution. Make sure to check your mailbox for this notice. If you don't pay on time, the city office might charge extra fees, and they're usually strict about deadlines.

What Happens if You Change Jobs or Leave Japan?

If you leave your job, you must pay any unpaid resident tax yourself. You can either make direct payments or ask your company to deduct the remaining tax from your final salary. Remember, the tax authorities expect you to pay your taxes no matter what.

If you're planning to leave Japan, you need to appoint a tax agent. This could be a friend or coworker who will handle your tax matters with the local government on your behalf.

Conclusion

Using the salary deduction method is usually the best choice. The process is the same for both local and foreign workers. Try to find an employer who can handle this for you. The amount of tax taken from your salary might be a surprise, but it will be clearly shown on your salary slip. As an expat contributing to the Japanese workforce, your salary slip is like your welcome to "Team Japan".

-Relocation