扶養控除 (fuyou koujo), tax exemption for dependents, is a tax deduction in Japan designed to reduce the taxable income of a taxpayer who has qualifying dependents. This deduction helps lessen the tax burden for individuals supporting dependents such as children, elderly parents, or other relatives.
To qualify for this deduction, the dependent must meet several conditions. They must be related to the taxpayer within six degrees of consanguinity or three degrees of affinity. They must either share a household with the taxpayer or receive significant financial support, such as regular remittances for living expenses or education. The dependent's annual income must not exceed 480,000 yen, or 1,030,000 yen in the case of salary income, after deducting necessary expenses.
The amount of the deduction varies based on the dependent's age and relationship to the taxpayer. For general dependents aged 16 or older, the deduction is 380,000 yen. For dependents aged 19 to 23, classified as "specific dependents," the deduction increases to 630,000 yen. For elderly dependents aged 70 or older, the deduction is 480,000 yen if they live separately, and 580,000 yen if they live with the taxpayer.
Taxpayers can claim扶養控除 through the annual year-end adjustment (年末調整) process conducted by employers or during the annual tax return filing. Proper documentation, such as proof of remittances or a declaration of shared household, may be required to substantiate the claim.
See Also
源泉徴収税 (gensen choshūzei) translates to "withholding tax" in English.
It refers to the tax deducted at the source of income, meaning the payer of the income withholds a portion of the payment and pays it directly to the tax authorities. This system ensures that taxes are collected in advance and helps to prevent tax evasion.
In Japan, withholding tax is commonly applied to various types of income, including salaries, bonuses, interest, dividends, and certain payments to non-residents. Employers, financial institutions, and other entities responsible for making payments must withhold the appropriate amount of tax and remit it to the National Tax Agency.
The rates and specific rules for withholding tax can vary depending on the type of income and the residency status of the recipient. For example, the standard withholding tax rate on salary income for residents is based on progressive tax rates, while non-residents might face a flat rate on certain types of income.
Properly managing withholding tax obligations is crucial for businesses operating in Japan to remain compliant with tax regulations.
控除 (kojo) is a tax deduction in Japan. It refers to the amounts that can be subtracted from an individual's total income to reduce their taxable income. By lowering the taxable income, tax deductions can significantly decrease the amount of tax an individual owes.
Various types of deductions are available, each designed to provide financial relief for specific circumstances. Common deductions includes those for dependents, medical expenses, social insurance premiums, and mortgage interest. For instance, the spousal deduction and dependent deduction help families reduce their tax burden by acknowledging the financial responsibilities of supporting a spouse or dependents.
To claim these deductions, taxpayers must provide the necessary documentation and meet certain eligibility criteria. Properly utilizing deductions are crucial for effective tax planning, as it can lead to substantial tax savings. Understanding and applying the appropriate deductions can help individuals manage their finances better and ensure compliance with tax regulations.
青色申告会 (aoiro shinkoku kai) is a Japanese term that translates to "Blue Return Association" in English. This association supports individuals and small business owners who choose to file their taxes using the blue return system, which is a more detailed and beneficial tax filing method in Japan.
The blue return system (青色申告, aoiro shinkoku) offers various tax advantages, such as higher deductible expenses and special allowances. Members of a 青色申告会 can receive guidance, resources, and assistance in preparing and submitting their blue returns accurately and efficiently. These associations often provide seminars, workshops, and personalized consultations to help members maximize their tax benefits.
Frequently Asked Questions
扶養控除 (fuyou koujo), tax exemption for dependents, is a tax deduction in Japan designed to reduce the taxable income of a taxpayer who has qualifying dependents. This deduction helps lessen the tax burden for individuals supporting dependents such as children, elderly parents, or other relatives.
Tax exemption for dependents is 扶養控除 (fuyou koujo) in Japanese.
← Back to Glossary
Japan’s first bilingual virtual mail, virtual address, and virtual receptionist provider
Get an all-in-one bilingual mail and compliance service to power the growth of your startup in Japan.
