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Hello. This is Yohji. In last week’s topic, I wrote about the types of taxes in Japan and how to save on residence tax. This time, I will tell you about the procedure for reducing income tax. If you live in your home country and your parents or siblings do not have a lot of income, it will be helpful, so please read it to the end.
Contents
How to reduce taxes correctly
If your income is less than 4 million yen, many foreign workers may be paying too much income tax. It is not good to pay too much tax. Use the salary you earned for yourself and your family. For that reason, I hope you read this topic carefully. Please spread it to your friends.
Let me explain. Specifically, we will use the systems of “dependent” and “year-end tax adjustment”.
Independent and year-end tax adjustment
Independents（扶養 / ふよう） are financial support for families who have difficulty living on their own income. We say things like “I have dependents” （私には扶養家族がいます/ わたしには ふようかぞくが います）and “There are three dependents in the household.”（3人扶養家族がいます / さんにん ふようかぞくが います）.
In Japan, depending on the existence of dependents and the number of dependents, there is a mechanism to reduce the taxable income of dependents and exempt family members from insurance premiums. Use this mechanism to save income tax. ※Called a dependent deduction（扶養控除 / ふようこうじょ）
Next, I will explain the year-end tax adjustment Year-end tax adjustment is a system that adjusts the excess or deficiency of the amount of income tax by comparing the one-year income tax to be paid with the income tax deducted from the salary in advance. For proper tax payment, many people working in Japan, including foreigners, have to make year-end tax adjustments. In most cases, the company will inform you of year-end tax adjustments every December.
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Types and conditions of support
If you are dependent on your family, there are three ways to deduct income tax.
Perhaps most foreigners working in Japan can apply in this category.
- Dependents
Relatives formed by a relative within the 6th degree of kinship and a marriage within the 3rd degree of kinship. 16 years old to under 75 years old - Annual income of dependents
1.03 million yen or less
* If you have income other than salary, 480,000 yen or less
- Dependents
Spouse - Annual income of dependents
1.03 million yen or less
* If your dependents has income other than salary, 480,000 yen or less
- Dependents
Spouse - Annual income of dependents
1.03 to 216 million yen
* If your dependents has income other than salary, 480 to 1.23 million yen or less
This system can only be used by independents (foreigners working in Japan) whose annual income is up to 10.95 million yen. In addition, it is a condition that the independents and dependents live together or make a living by remittance of the independents.
[Foreigners whose income is 7/10 or less] I will explain how to save National Health Insurance premiums.
How to reduce taxes paid in Japan
How to year-end tax adjustment
- Individual number （This is called マイナンバー）
Foreigners who are registered as residents in Japan will be assigned an individual number like Japanese people. Within a few weeks after registering your address at the city hall, the local government will send you a notification document of your individual number by registered mail.
※The individual number is a 12-digit number.
※Do not throw away documents with your Individual number. - Hanko (Name seal)
Signature is also acceptable - Application for (change in) Exemption for Dependents of Employment Income Earner（給与所得者の扶養控除等(異動)申告書 / きゅよしょとくしゃの ふようこうじょとう(いどう) しんこくしょ）
※You can get it from the company every December. - Application for Basic Exemption of Employment Incomes Earners（基礎控除申告書 / きそこうじょしんこくしょ） and Application for spouse of Employment Income Earners（配偶者控除等申告書） and Application for Exemption of Amount of Income Adjustment （所得金額調整控除申告書）
※You can get it from the company every December.
※These are put together in one sheet.
Right : Application for Basic Exemption of Employment Incomes Earners and Application for spouse of Employment Income Earners and Application for Exemption of Amount of Income Adjustment
The following documents must be prepared by yourself if your dependents are outside Japan. Also, prepare a translation that explains the English document.
- Relatives documents (Either of the following)
A) A copy of the family registration slip and the passport of the foreign relatives
B) Documents such as family register, birth certificate, marriage certificate issued by foreign governments
(limited to those with the name, date of birth and address of relatives residing outside Japan) - Remittance documents
A) A copy of the foreign remittance request form
B) Credit card statement
※If you have more than one dependent, please send them separately.
This is because A copy of the foreign remittance request form and Credit card statement are required for the
number of dependents.
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How to fill out documents
Please look forward to next blog. The method of writing the year-end tax adjustment documents will be other topics, so please wait for a while.
Year-end tax adjustments are required at the end of the year, so please you don’t have to hurry. However, please do not throw away this year’s remittance request form.
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How much can you save?
Some of my friends saved 50,000 yen a year. If you have many dependents, you can save even more, so please try to apply for a dependent deduction!
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Conclusion
Deductions for dependents and year-end tax adjustments are a bit difficult for Japanese people. However, if you meet the conditions by following the procedure, you can significantly reduce the tax, so let’s do your best. If you don’t know the procedure, you can ask the person in the company or you can consult with the online community “useJapan”.
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Feel free to contact me if you have anything you would like us to cover as a topic.
See you !
This is a huge help for a foreigner like me; however, I can help you improve this blog especially in the grammar construction and contextual aspect, so it will be more comprehensive and easy to digest.
I’m not good at knowledge of the website and English skills, so I would be very happy if you could help me, and I think that many foreigners will be able to help!
mr. yoji can i refund the residence tax that i’m paying yearly. hoping to hear your explanation.thank you very much
Thank you for reading my blog.
Unfortunately, the residence tax you paid will not be returned.