Tax
http://www.hyogo-jp.or.jp/hiaf/eg/hlgmne.41.htm

Income tax for Foreign Residents in Japan
Residents, which means persons whose domicile is in Japan or who have resided continuously in Japan for one year or more, need to pay Income tax.
In the case of income tax, where specific incomes are concerned the employers may collect the tax from salaries.
This method is called tax withholding at source, and companies which pay salaries are called obliged tax collectors at source.
Income tax is levied on the previous year's income, and this income cannot be determined before December 31st.
However, at the point in time when salary earners receive their salary income tax is deducted at source. Other income earners need to file a Final Return.


Childbirth and Year-end Adjustment
Every month the amount of tax collected at source is a so-called provisional amount.
And so at the end of the year, any change in the number of dependent relatives, deductions for life insurance and insurance against loss are made at the same time, allowing the amount of tax to be decided.
This is called the Year-end Adjustment.
The surpluses or shortfalls may be adjusted by comparing with the amount of tax withheld at source.
If a child is born before Dec. 31st in the same year, but after the year-end adjustment, it is possible to make a further adjustment until the end of January in the following year.
These procedures are undertaken by employers, so in the case of a change in circumstances, report it to them as soon as possible.


Tax refund for people with large medical expenses
Even people who are not required to file a Final Return, may file in order to get a rebate in the case of large medical expenses such as a delivery which happens within the year.
This adjustment cannot be done by the Year-end Adjustment.
The final return must be filed the following year from February 16th to March 15th.


Medical Expenses Deduction from Income
If taxpayers or dependents pay medical expenses more than 100,000 yen during the period of January to December, the following amount may be deducted from the total income amount attached receipt.

1. Calculation

Deduction for Medical Expenses (2,000,000. yen - maximum)
= {(Paid medical expense amount) - (Insurance payment: "Childbirth and Childcare Lump Sum Grant(300,000 yen for each delivery)" + "Childbirth and Childcare Additional Sum"}
-(either lesser amount: "100,000 yen " or "5% of total income amount")
2. Applicable medical expenses
a) Medical fees and consultation fees paid to doctors or dentists.
b) Medicine charges
c) Hospital charges
d) Service fees paid to massage, acupuncture, and moxa cautery
e) Service fees paid to nurses or maternity nurses
f) Other necessary expenses such as commutation fees(taxi charges), room charges, meal charges, and medical instruments fees.

3. Receipt Attachment
In order to a file Final Return for a medical expense deduction, you must attach receipts of those expenses and notice of "Childbirth and Childcare Lump Sum Grant".
Do not worry if you don't have or lost some of them.
You can use a copy of a personal memo or housekeeping book records instead.

For further details regarding Income tax and Final Returns, please consult your local tax office.
  This page is supported by Marubeni Fund Subsidy in 2000.

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Last Updated on September 30, 2000