税 (zei), refers to taxes, which are mandatory financial charges imposed by the government on individuals and businesses. These taxes fund various public services and governmental functions. In Japan, several types of taxes each have specific regulations and purposes.
所得税 (shotokuzei) is an income tax imposed on individual earnings, calculated based on total taxable income after allowable deductions. This tax is progressive, with higher income brackets taxed at higher rates. Employers typically withhold this tax from salaries, and it is settled through annual tax returns or year-end adjustments.
消費税 (shohizei), or consumption tax, is a value-added tax on most goods and services. The standard rate is 10%, with a reduced rate of 8% for certain items like food and non-alcoholic beverages. Businesses collect this tax from consumers at the point of sale and remit it to the government.
法人税 (hojinzei) is a corporate tax on company income. It is calculated by determining a corporation's taxable income, applying the relevant tax rate, and subtracting any applicable tax credits. The corporate tax rate varies based on the size and type of corporation.
住民税 (jūminzei) is a local tax paid by residents to their municipalities and prefectures, calculated based on the previous year's income. It funds local services and infrastructure. Unlike income tax, resident tax is generally a fixed rate.
These taxes ensure that governments have the necessary resources to provide public goods and services, maintain infrastructure, and support economic stability.
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
税 (zei), refers to taxes, which are mandatory financial charges imposed by the government on individuals and businesses. These taxes fund various public services and governmental functions. In Japan, several types of taxes each have specific regulations and purposes.
Tax is 税 (zei) 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.
