Now it is December, and time to file your end-of-year taxes in Japan. You must submit documents in order to calculate the difference between the income tax that is withheld from your salary over the year, and the actual amount of tax you should owe. You may receive some money back, or you may be required to pay more. This process is called “nenmatsu chosei” in Japanese.
Are you subject to nenmatsu chosei?
If you have an address in Japan, or have been living here for more than 12 months, you are required to submit a year-end tax adjustment.
If you are here on a working holiday, then you are not required to submit the tax adjustment form.
How do you submit the tax adjustment form?
For most people who are employed by a company, the HR department will provide this form for you. You can find an English version on the National Tax Agency website, which you may be able to fill in and ask your company to fill out the Japanese form based on that. If not, you can still use it as a guide. The form requires information such as:
- Number of dependents
- Whether you have any housing loan or insurance premium deductions
Your company will then submit your form and your finalised adjustment will be calculated and made with your final paycheck of the year.
Your withholding tax statement
At the end of the year, you will receive a “gensen choshuhyo” from your company. This shows how much income you were paid, and how much income tax you paid, over the year. If you left a company mid-year, they must still issue you this statement. Make sure you check it to ensure that all the details are correct. You need to keep this document as you will need it if you change jobs, or apply for permanent residency.
People who need to file their own tax return
For most people this process is done through their company and very easy. But for some, such as high income earners or freelancers, you must do it yourself at the tax office or online, by March 15. People that need to file their own income tax are:
- People who earn an annual income of more than 20 million yen
- People whose secondary income is greater than 200,000 yen
- People whose company is based overseas
- People who are self-employed
If you are filing your own tax return, which form should you fill out?
Form A – For people with taxable income in Japan, the most common
Form B – If any of your income comes from real estate, investments or business operations (in addition to form A)
If you need help filling in any forms in Japanese, or need any documents translated into English or Japanese, feel free to speak to us.