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UPDATE | January 17, 2024

[Japanese Taxes] When and how do international students pay taxes?

What do you like most about Japan?
For me, a Belarusian, it is a rich natural environment with the sea, mountains, and forests. However, of course, money is needed to keep both nature and cityscapes clean. As you know, in order to collect that money, the government collects taxes. (By the way, did you know that the "Kanji of the Year" for 2023 is "tax"?)
Just like Japanese people, foreigners can enjoy the beautiful nature and cityscape, and in case of an emergency, they can call the police, fire trucks, and ambulances, and use various public facilities and services. Therefore, foreign nationals and international students who have lived in Japan for a while also need to pay taxes.
However, there are many types of taxes, so what kind of taxes should I pay, and when and how? How long do you have to live in the country to become taxable?
This article explains the taxes that international students must pay in Japan. (Please note that there are some differences in taxation from foreign workers.)

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1. Income tax

For example, if you work part-time, you will receive a salary. That salary becomes income, and the tax levied on that individual's income is called "income tax." The higher your income, the higher the tax rate.

[How to calculate income tax to be paid]

Income - Expenses etc.※1Income amount
Income amount-deduction※2Taxable income amount
Taxable income amount×tax rate※3= Income tax that must be paid



*I will explain the parts marked with the mark.
1. “Expenses” are the amount of money you receive for doing work/part-time work. For example, transportation costs to your part-time job are included in your expenses. Also, if you often use your own cell phone to make calls during your part-time job, and you receive communication costs from your part-time job, those amounts will be considered expenses. Additionally, if you need to stay overnight on a business trip, the cost of your stay will also be recognized as an expense.

2. "Deduction" is a mechanism that reduces the taxable amount. When calculating your tax liability, the amount you pay will be reduced by subtracting various deductions that apply depending on your personal circumstances.
For example, international students attending certain schools, such as universities and graduate schools, are eligible for the "working student deduction." However, please note that those attending Professional Training College or Japanese language schools are not eligible.
In addition, if you are an international student from a country with which Japan has a tax treaty, you may be exempt from income tax. Regarding whether the country of origin is a party to a tax treaty,[Ministry of Foreign Affairs article search site]Please check.
There are various deductions that take into account other circumstances (for example, if you have dependents), so please consult with the tax office as necessary.

3. The tax rate isTaxable income amountIt is decided by. Please refer to the table below.

Taxable income amount

tax rate

Deduction amount

1,000 yen - 1,949,000 yen

5%

0 Yen

1,950,000 yen - 3,299,000 yen

10%

97,500 yen

3,300,000 yen - 6,949,000 yen

20%

427,500 yen

6,950,000 yen - 8,999,000 yen

23%

636,000 yen

9,000,000 yen to 17,999,000 yen

33%

1,536,000 yen

18,000,00 yen - 39,999,000 yen

40%

2,796,000 yen

40,000,000 yen or more

45%

4,796,000 yen



Now, how exactly do you pay income tax?
In many cases, the amount to be paid is automatically calculated and deducted from your paycheck by your part-time job, so you do not need to complete the procedures yourself. This deduction of income tax from your salary is called "withholding tax."
If you have a large income other than your part-time job salary, you will need to submit a final tax return to the tax office and pay the tax yourself by the filing deadline.

The period for filing and paying income tax for each year is from February 16th to March 15th of the following year. Consult with your part-time job or tax office before the deadline to see if you need to complete any procedures.

When I was studying abroad, I also wondered whether or not I needed to go through the necessary procedures, as I did not receive notices such as ``Please pay income tax.'' However, I felt at ease because I consulted the tax office about my case by the deadline and received an easy-to-understand explanation.

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2.Resident tax

"Resident tax" is a tax paid to the prefecture and city where you Street address. International students who have Street address in Japan and receive income above a certain amount as of January 1st of the year are subject to resident tax. The amount you should pay is determined by your income from January 1st to December 31st of the previous year.

There are two payment methods for resident tax: special collection and ordinary collection.
Special levy is deducted from your salary every month like income tax and paid to the local government by your part-time job. Check whether your part-time job will pay resident tax. If payment is not made, the payment method will be normal collection.
Ordinary collection means you pay it yourself. A resident tax payment notice (tax notice) will be delivered to your home from your municipality around June every year, and you will pay your resident tax by paying the amount written on it.

Those who do not work part-time or whose total income in the previous year does not exceed a certain amount are exempt from taxation and do not need to pay resident tax. However, to avoid receiving a tax bill by mistake, you must file your resident tax return at your city/ward office between February 16th and March 15th. If you do not notify the city/ward office that you have no income, they will not be able to confirm that you are eligible for tax exemption, so be sure to file a tax return.

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3.Consumption tax

If you look at the price of any product at any store, you'll see a price tag that says "tax included." What kind of tax is included in the price of sold products is "consumption tax".

Consumption tax is a tax levied on the sale of products and provision of services. Consumption tax is also charged when you eat and drink at cafes, etc.
Consumption tax is paid to the store along with the product price at checkout. There are no special procedures or additional payments required, so you should never make the mistake of forgetting to make a payment.

Consumption tax applies to all people living in Japan, including foreigners and Japanese citizens. However, those with a "short-term visitor" residence status may be exempt from consumption tax. If you are studying abroad for a short period of 3 months or less, or if you are coming to Japan to take a short-term Japanese course, be sure to check out our consumption tax-free shops!

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4. Conclusion

There are various other types of taxes in Japan. For example, people who own a car pay vehicle tax, and people who own a house pay property tax.

If you are an international student with a residence card, first of all, do not know about "income tax" and "resident tax", otherwise you may miss the necessary procedures and deadlines for payment, so by knowing this, you can avoid trouble. You can As a former international student, I have often thought that taxes are difficult, so I wrote this article so that you don't have to worry about it like I did. I would be happy if it was helpful.

Pay your taxes and enjoy your favorite places in Japan that are kept clean thanks to your taxes!

The person who wrote this article

Kandajenka Arena

An employee of ACCESS NEXTAGE Co., Ltd. Career Support Division for Foreigners. Originally from Belarus. She will come to Japan in June 2021 and will participate in the government-sponsored research student program at Ochanomizu University until March 2023. His hobbies are PC games, drawing, and international exchange.

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