Taxes in Japan include national taxes collected by the national government and local taxes collected by prefectural and municipal governments.
🔸 National Tax
Income tax, corporate tax, inheritance tax, consumption tax
🔸 Local Taxes
● Prefectural Taxes
Prefectural residents tax, automobile tax, local consumption tax
● Municipal Taxes
Municipal residents tax, property tax, light vehicle tax
Note: For inquiries about national taxes or prefectural taxes, contact the National Tax Agency or a prefectural taxation office respectively.
Residents Tax (Individual Municipal Residents Tax and Prefectural Residents Tax)
Individual Municipal Residents Tax (市民税// Shiminzei) and Prefectural Resident Tax (県民税//Kenminzei) are collectively known as Residents Tax (住民税//Jūminzei), and are paid together.
Individual Municipal Residents Tax + Individual Prefectural Residents Tax = Residents Tax
Residents Tax is paid by everyone who has an address in Japan as of January 1 of that year and who earned an income the previous year. The amount of Residents Tax you pay is made up of a flat rate (均等割//Kintō Wari) and a rate based on your income from the previous year (所得割//Shotoku Wari).
Residents Tax = Flat rate + Rate based on your income from the previous year
For more information, see the City of Hiroshima website (https://www.city.hiroshima.lg.jp/soshiki/26/199970.html) or contact the Municipal Resident Tax Section of the tax office in charge of your local ward.
📝 Income Tax Convention
If your home country is part of the Income Tax Convention (a formal agreement between countries covering tax issues)with Japan and you are an exchange student or vocational trainee (those undertaking training in a company/private sector) etc., you might be exempted from income tax and/or residents tax. You must fulfill certain criteria to be exempted, and you must apply separately for exemption from income tax and residents tax. Please be aware that you cannot be exempted from residents tax if you only apply for income tax exemption.
How to pay your taxes
There are two methods of paying tax:
1. Your employer subtracts the amount of tax you owe from your income and pays it to the City.
2. You pay taxes by yourself. The City will send a notification to those paying via the ordinary collection method; confirm the contents of the notification and pay your tax by the due date.
What happens if you don’t pay your taxes?
If you do not pay your taxes by their due date, you will be required to pay not only the taxes you should have paid, but also late payment charges. The City may also take proceedings against you for the recovery of unpaid taxes by seizing possessions, including your salary. Pay your taxes by the due date to avoid this.
For further information, see the City of Hiroshima’s website https://www.city.hiroshima.lg.jp/site/english/18862.html, or contact the relevant division of the Payment Department that deals with your ward.