Japanese Taxation System
Taxation of Foreign Nationals
Income Tax Returns
Income from Wages and
Consumption Tax and Local Consumption Tax
End of Year Tax Adjustments
Income tax is a tax paid by individuals in proportion to income earned each year (from January 1 to December 31). The Income Tax Law takes into consideration each taxpayer’s ability to pay, creating 10 tax brackets and setting down a method of calculation for each.
Income taxes are calculated by applying the formula in the table below to a person’s
taxable income, which is calculated by deducting basic, spousal, and dependent
deductions and the like from total income ( >> Tax Deductions ).
|3,300,000 yen～6,949,000 yen
|6,950,000 yen～8,999,000 yen
|9,000,000 yen～17,999,000 yen
In a process referred to as gensen choshu, income taxes are often
withheld at the source from salaried workers’ salaries and wages. In this
case, the employer pays the employee’s taxes in advance, and provides
the employee with an annual withholding certificate.