One of the nice things about Japan is that the company takes care of the taxes. Your company (school, BOE) takes care of everything for you. Unfortunately, the same is not true for most other countries, and even though you're over here, your home country may still want to hear from you on tax day. While the basics are here, please check with your local tax office in your home country for detailed information.
Something to look at for from your school will be your Statement of Earnings (gensenchoshuhyo 源泉徴収表). Please take good care of it, as you will probably need it when you are filing your taxes later.
Statement of EarningsEdit
Depending on your country of origin, when doing your home country tax return, you may have to include a statement from your Contracting Organization in Japan about your annual earnings. This statement is known as your gensenchoshuhyo, and is issued to you in January of each year. It covers the period from January 1st to December 31st of the previous year. You might also need it if you renew your visa with a different employer, so try not to lose it. (If you do lose it, you can probably ask your school to print you off a new copy.)
If you're finishing up on the JET Programme, your office should be able to issue one for the current year when you leave (i.e., if you're leaving in Summer 2007, you can get a statement for Heisei 19, even though the financial year isn't over). However, if for whatever reason they say they can't issue it, be sure to leave an address that they can send it to you next year.
The following is a breakdown of the various figures you are likely to see on your gensenchoshuhyo. Remember that even though we all earn 3,600,000 yen, the figures that appear on the gensenchoshuhyo will vary because of nationality and job type (different tax liabilities), length of time on JET (partial year vs. full year), where you live in Japan (prefectural & municipal tax liabilities), and whether you have dependents.
- Gross Income. This includes the Contracting Organization's (CO) contributions for municipal, prefectural, and income tax.
- Wage earners are allowed an amount for regular business cost of living expenses. It's calculated based on your income. There's a booklet at every CO (the administrator will have it) that lists every gross income bracket, followed by the taxable amount after the allowance is deducted. This is base figure 2 from which your final taxable income is decided.
- This figure is 6 + ￥380,000. ￥380,000 is the standard amount that a person with no dependents is allowed to claim each year. If you have a dependent, you get a bigger deduction. Even if you only work for 6 months, the ￥380,000 stays the same (no pro-rata).
- This is your final tax payable. Note: it's NOT your final taxable income, but the amount of tax you paid on your final taxable income (which doesn't appear anywhere on the paper). To get your final taxable income, do this: 2 - 3= final taxable income. Round this down to the nearest ￥1,000. Tax payable is 10% of this amount. In this example, that should be ￥170,800. So why is there a different number at 4? Finishing in 2005, the government allowed on further deduction of 20% of the tax payable. In this case, that would be ￥34,160, so ￥170,800 - ￥34,160 ￥136,600 (rounded down to the nearest ￥100), which is the number you see in 4. From 2006, this deduction is being lowered to 10% of the tax payable (in this case, ￥17,080) so final tax payable will increase.
- Indicates number of dependents (in this case, none).
- Total from adding national health and employment insurance contributions together.
- The 20% amount that is deductible at 4. Changing to 10% for 2006.
- Indicates your status (in this case, 外国人, or foreigner).
- Indicates which year, whether you worked a full year, started part way through, or left part way.
- Date of Birth according to the imperial calendar (in this case April 1st of Showa 55, or 1980).
Thanks to the SPA in Aomori for the resources.
As a general rule, the resident tax is one of those things that you will not have to worry about. Your school handles all of your taxes, and if you have to pay the resident tax, your income will be increased so that in the end you receive the same salary as JETs who do not have to pay the resident tax. Either your school will set aside a certain amount of money and pay it on your behalf in June (when the tax is due), or the amount for the tax will be added to your salary, and you will have to pay the tax yourself.
ALTs must be out of the UK for one full Tax year if you want to avoid paying UK taxes. Therefore, if you leave JET after one year you will be liable to pay English taxes on your return. If you stay for longer than one full tax year, then you do not have to pay UK taxes. Again, please check with your local tax office back home to be 100% sure.
ALTs have the choice of whether to pay Japanese or Australian taxes. We would prefer you to pay Japanese taxes, and that also works out better for you anyway. If you do choose to sign the tax exemption form, exempting you from tax payment in Japan, you will receive the same remuneration as other JETs not paying taxes, but will receive no financial assistance for paying tax on your return to Australia.
ALTs are subject to tax in Japan.
Income earned in Japan is tax-exempt for American JETs. When filing your taxes, you must apply for exemption through form 2555. To qualify for exemption, you must be physically present for 330 consecutive days in a foreign country. The IRS allows an automatic 2 month extension on tax filing for citizens overseas, but to fulfill the 330 day requirement, you must apply in writing for another 2 month extension. See the http://www.irs.gov/ for details. Also, the Japanese government requires all first and second year American ALTs to file for form 6166 "United States Residency Certification" to be exempt from Japanese Income Taxes. To acquire the form, first you must download and fill in form 8802 from the IRS website and send it in to them. If they accept the application, they will send you form 6166, which you can then turn into your school. Although there is no set deadline for turning in the form, most schools prefer to have it in by the end of the calendar year, and almost all require that it be turned in by the end of March. Ask your school about when you have to turn it in.