Japanese Business Glossary

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.

エコカー減税 (ekoka genzei), Eco-car Tax Reduction, is a Japanese government incentive designed to promote the purchase of environmentally friendly vehicles. This tax reduction aims to reduce emissions and encourage the use of low-emission vehicles by providing tax benefits to those who purchase cars that meet specific environmental standards.

There are three main types of taxes that can be reduced under this scheme: the Automobile Acquisition Tax, which is a one-time tax paid when purchasing a new vehicle; the Automobile Weight Tax, which is paid at the time of vehicle inspection; and the Automobile Tax, which is an annual tax based on the engine size of the vehicle. Eco-friendly cars that meet the criteria may receive reductions or exemptions from these taxes.

To qualify for the eco-car tax reduction, vehicles must meet specific fuel efficiency and emission standards set by the Japanese government. The standards and the amount of tax reduction can vary depending on the vehicle's performance and the year of purchase. These incentives are part of Japan's broader efforts to reduce greenhouse gas emissions and promote sustainable transportation.

扶養家族数 (fuyou kazoku suu) refers to the number of dependents a person has.

In Japan, this typically includes family members such as a spouse, children, and sometimes parents or other relatives who rely on the individual for financial support.

This number is important for tax purposes and social security benefits. For instance, the number of dependents can affect the amount of deductions an individual is eligible for, thus influencing their taxable income and overall tax liability.

When filling out tax forms or other official documents in Japan, you will often need to indicate the number of dependents to ensure accurate calculation of your financial obligations and benefits.

住宅ローン減税 (jutaku ron genzei) refers to the "Mortgage Loan Tax Deduction" in Japan. This tax incentive is designed to promote home ownership by allowing individuals who have taken out a mortgage to purchase a residence to receive a deduction on their annual income tax. The deduction is typically a percentage of the remaining mortgage balance and can be claimed over a set number of years, often up to ten years. This reduction in taxable income helps to make home ownership more affordable by effectively lowering the overall cost of borrowing. To qualify for jutaku ron genzei, specific criteria must be met, including the use of the property as a primary residence and adherence to certain mortgage loan conditions.

配偶者特別控除 (haiguusha tokubetsu koujo), special spouse deduction, is a Japanese tax deduction aimed at reducing the income tax burden for taxpayers whose spouses have limited income. This deduction is designed to support households where one spouse has a lower income, usually from part-time work or other minor sources.

To qualify, the taxpayer’s spouse must have an annual income within a specified range. The exact range may vary each year, so it’s important to check the current tax regulations. The amount of the deduction decreases as the spouse’s income increases. The maximum deduction is applied when the spouse's income is at the lower end of the specified range and gradually decreases as the income approaches the upper limit of the range.

The deduction is also influenced by the taxpayer’s income. There are thresholds for the taxpayer’s total income, and exceeding these thresholds can reduce or eliminate the deduction.

The aim of this deduction is to support households by lowering the tax burden, thus encouraging economic stability and potentially increasing consumer spending.

For the exact figures and more detailed conditions, it is advisable to refer to the latest information provided by the Japanese tax authorities or consult with a tax professional.

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.