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Micky777
Joined: 19 Feb 2005
Posts: 7
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 Posted: Mon Feb 28, 2005 6:29 pm Post subject: Japanese Tax |
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| I'm coming to japan in a couple of months and trying to settle finance issues. I know the income tax averages out at about 7%-8%. Is there an equilivalent of British 'council tax' too? This could be a local government tax for public services that are managaged locally. |
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PAULH
Joined: 28 Jan 2003
Posts: 4672
Location: Western Japan
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| Posted: Mon Feb 28, 2005 8:45 pm Post subject: Re: Japanese Tax |
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| Micky777 wrote: |
| I'm coming to japan in a couple of months and trying to settle finance issues. I know the income tax averages out at about 7%-8%. Is there an equilivalent of British 'council tax' too? This could be a local government tax for public services that are managaged locally. |
You are referring to city tax (shiminzei) or a local town tax (chominzei) which is levied in the second year of residency. Rates are calculated on your previous years income and amounts vary according to each area. Expect to pay about 3-4% in city tax in your second year as well as direct taxes. Some employers will take it out of your salary in the first year but any excess payment etc can be figured into your returns when you do a tax return at the end of the year. |
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Micky777
Joined: 19 Feb 2005
Posts: 7
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| Posted: Tue Mar 01, 2005 3:09 pm Post subject: |
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| Thanks for the reply. If it is levied in the Second year of residency, what happens if you move after (or before) one year. I know a lot of people plan to teach ESL for a year. I'm hoping for more like two or three years, but will plan to move to different areas during this time. Also, Is it hghly variable (as it is in the UK) or fairly standard 3-4% across all of Japan? |
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PAULH
Joined: 28 Jan 2003
Posts: 4672
Location: Western Japan
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| Posted: Tue Mar 01, 2005 5:06 pm Post subject: |
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| Micky777 wrote: |
| Thanks for the reply. If it is levied in the Second year of residency, what happens if you move after (or before) one year. I know a lot of people plan to teach ESL for a year. I'm hoping for more like two or three years, but will plan to move to different areas during this time. Also, Is it hghly variable (as it is in the UK) or fairly standard 3-4% across all of Japan? |
Micky, this is a municipal tax and as such pays for things like ambulance, fire service, waste collection, sewage disposal.
Technically even if you move to a different area you are still (legally and morally) obliged to pay for city tax, though I do read posts of people who think up ways to avoid paying it, as though Japanese laws dont apply to them because they are foreigners or are on low incomes compared to Japanese. They are not like the NHK man where they will hunt you down and stop you leaving the country, but I think if you want to avoid problems later on its best to pay it when it comes.
As it is a municipal tax it is levied on the local population and (in my experience) if you live in a more provincial area the local tax will be a little higher, as you have less people in a rural area paying for the same services. There are less services in general but also less people.
In Tokyo and Osaka the council can spread the load among a greater population (In Osaka you also pay for a lot of government pork (like new airports) and white elephants but thats another story. A lot will depend on what you earn and the area you live in, so I cant give you a ballpark figure as its levied by local government on all residents in that area. You could be paying 5-10% or more or less than someone living in the neighboring town. I can only tell you what I paid but that may be different from someone else on the same income but living somewhere else.
Just one last point, if you think of moving every year to escape paying city tax you will incur costs in relocation, paying key money at a new apartment, losing deposits, agents fees so what you try to save you will spend of moving anyway, an exercise in futility if you ask me.
Second point. Sometimes your employer will take it out of your salary, and as you move house the city office will send the bill to your new address. Dont think just becuase you move to a different area you dont have to pay or they wont find you, as all your details, address are recorded at the city office and will be updated every time you update your gaijin card. |
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PAULH
Joined: 28 Jan 2003
Posts: 4672
Location: Western Japan
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| Posted: Tue Mar 01, 2005 5:25 pm Post subject: |
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Some more on "city tax" by JETs (CIR)
Question: Anyone get a City Tax notice saying that you have to pay the city for tax? (Dan from Gifu)
During this month, you may receive a slip of paper or bill for juminzei or Local Inhabitants' Tax. Since
ALL CIRs are liable for tax in Japan, CIRs are required to pay the local tax. The Local
Inhabitants' Tax is borne by your Contracting Organisation. Your 3.6 million yen salary is AFTER income
and inhabitant taxes have been paid so this tax money is not coming from your own pocket.
In most cases, the Contracting Organisation will handle your payments by:
1. Making monthly or quarterly payments
2. Including the money for tax in your gross monthly salary
3. Paying the money in a lump sum for you
PLEASE ask your CO how the payments are being handled. (Jennifer at CLAIR)
Obviously #2 can be a problem if they don'T TELL you that they've increased your salary and you're
supposed to use it to pay your shiminzei. Loads of people end up not noticing, spending the extra cash,
and finding themselves with an 8 man bill and no money saved in June.
Check your pay slip to see if you have shiminzei coming off it each month (I guess it might have a
different notation depending on where you live - check with the accounts person if you're not sure) If you do,
just give the bill to your supervisor when it arrives and they'll sort it out - you might even get some cash back
if they've taken too much every month. In this case, city tax time is a time for great rejoicing.
One more thing - last time although I'd had 9000 coming out of my salary every month, I got no bill. We checked it out with the shiyakusho, and it turned out I didn't have to pay because I had a dependent - my husband. So I got all the money back. If you're a 1st year with a dependent, it might be worth checking up on this. (Cath) |
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Micky777
Joined: 19 Feb 2005
Posts: 7
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| Posted: Tue Mar 01, 2005 6:09 pm Post subject: |
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| Thanks Paul. I wasn't seeking a way of avoiding paying such taxes, and recognise the moral necessity of this sort of thing. It sounds like a good, progressive system.(i.e. based on income..unlike the UK). I was just trying to get a better picture of what my financial situation will be like in a year or so's time. Thanks for the info. |
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