Current (2016) Japanese Tax for Ex Pats

February 14, 2016 5:27 PM

I know MeFi includes several ex-pats living and working in Japan; I'd like to know what it's like dealing with the national/prefectural/city tax agencies as an employee of a foreign company. How big of a hassle is it these days, and how big is the combined bite?

I haven't lived in Japan for about 20 years, but may have an opportunity to return. I know about general living expenses (from visits in the interim), but I'd like to get an idea of tax rates and filing requirements so I don't underestimate the "all up" number for living and working there.

posted by spacewrench to Work & Money (1 answer total)

If you are an employee of a foreign company operating in Japan (like, there's an HR department in Japan, etc., even if tiny) there's a 99% chance your company will just do all your Japanese tax stuff for you. If your company doesn't really operate in Japan but they're sending you there (like, say, your company and a Japanese company are partners on a project so your head office is sending you to Japan to work, etc.) then you'll have to do your own tax paperwork.

I don't know what country you're from, so I can't really speak much to your specific situation, but, for example, I do my own Japanese taxes, and they are much, much easier than my U.S. taxes (which I still have to fill out, even though I don't end up having to pay any).

Prefectural/city taxes are calculated automatically based on your income tax, so you don't have to do anything special. You send in your national income tax paperwork, and your prefecture / city sends you a letter telling you how much prefectural/city tax you owe, and when/how to pay it.

As far as numbers, national income tax is graduated and based on income after various exemptions, so it's kind of hard to figure out, but the rule of thumb seems to be something like 10% unless you make quite a bit of money ($200,000 or the like). For me, for example, last year it was 10.5%. Residential tax came out to 7.3%.

Also remember to add in national pension (if you have to pay into it) and national health insurance (everyone). Hopefully someone else can provide info on those, because there is weirdness like a maximum amount, and I don't really understand the formulas or processes involved in them.
posted by Bugbread at 12:01 AM on February 15, 2016 [1 favorite]