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Outline of Tax System

Anyone living in Japan for one year or longer, and receiving a certain level of income, is required to pay taxes in the same way as a Japanese resident.

Types of Taxes

There are two types of tax in Japan: "national tax" paid to the national government, and "local taxes" paid to prefectures and municipalities. The main taxes that relate to us in our everyday lives are shown in the table below (shaded cells).

Income tax

The tax imposed by the national government on an individual's annual income. Salaried workers have this tax deducted in advance from their salaries. Non-salaried workers must declare their income and pay income tax between February 16 and March 15 of the following year.

Local tax (prefectural tax, municipal tax)

The term "local tax" refers collectively to prefectural tax and municipal tax. This tax is imposed by the prefectural and municipal governments against your income for the previous year. Most salaried workers have this tax deducted in advance from their salaries. Other people will be sent a notification of taxes due from City Hall, and must make payment in accordance with this.

Automobile tax, light automobile tax

These are taxes imposed on people who own an automobile or light automobile respectively. You will be sent a written payment notice, and must make payment in accordance with this.

Consumption tax

This tax is included in the price of goods and is paid when you buy things, etc. It is collected and paid by the shop.