Consumption Tax
A consumption tax of 10% (as of August 2020) is charged on most goods and services throughout Japan.
Resident Tax
Residents
International researchers residing in Japan through January 1 and receiving income (excluding non-residents*) must pay a resident tax to their prefecture and municipality. It is calculated and billed by the municipality where they were residing as of January 1 of the current year based on income from the previous calendar year. Therefore, international researchers typically do not owe resident tax during their first calendar year in Japan. The payment method will differ depending on the status of your employment. Resident tax will be deducted from your salary in monthly installments starting in June, or a bill will be sent to you by mail from your municipal office around May or June.
Note: There have been cases where employees working under the annual salary system have received a bill unexpectedly from their municipal office. If this happens to you, please bring your bill to the Payroll Services Group, Human Resources Division to determine if procedures to change the payment method can be performed through Tokyo Tech.
IMPORTANT
If you plan to leave Japan permanently, you may need to settle unpaid resident tax.Before leaving Japan, be sure to contact your municipal office regarding the necessary procedures.
For more information, visit your municipality’s website.
*You are considered as a non-resident in Japan for tax purposes unless you have a domicile or have had a residence continuously for one year or more in Japan. (National Tax Agency website)
Income Tax
Residents
International researchers employed by Tokyo Tech will have income tax withheld from their monthly salary. Income tax is calculated based on total yearly salary minus deductions and exemptions. As the amount is an approximation, the total amount withheld over the tax year may differ from your actual tax liability. The difference between the tax withheld and your actual tax liability is calculated, and that difference is refunded to or deducted from your salary in December of the same year in the year-end tax adjustment. To process the year-end tax adjustment, necessary forms and supporting documents must be submitted to the Human Resources Division.
Notes:
・Non-residents are exempt from the year-end tax adjustment.
・Tokyo Tech does not process year-end tax adjustments for those who receive salaries from another employer as their primary source of income.
・Those who meet certain conditions must file a final income tax return (確定申告, kakutei shinkoku) at their local tax office in addition to completing the year-end tax adjustment.
Resources:
・Tokyo Tech Year-End Tax Adjustment website
http://www.jinjika.jim.titech.ac.jp/nencyo/nencyo_matome/en/index.html
・National Tax Agency
https://www.nta.go.jp/english/index.htm
Non-Residents
Non-residents are generally subject to a flat tax rate of 20.42% on their Japan-sourced gross salary and allowances without deductions or exemptions. Residents of countries that have a tax convention (tax treaty) with Japan may benefit from a tax reduction or exemption on their income.
https://www.nta.go.jp/english/itaxes/individual/12006.htm
Tax Conventions (tax treaties)
Japan has established tax conventions with many countries in order to avoid international double taxation and to prevent fiscal evasion. Researchers meeting certain conditions may apply for tax exemption through Tokyo Tech. Note, however, that the conditions for eligibility are very specific, particularly regarding residence status, and that application documents differ depending on your visa status and residency for tax purposes. Therefore, we advise you to fully understand the tax convention between your country of residence and Japan, and contact the appropriate offices through your department’s administrative office before applying.
(Reference) Webpage on Tax Convention by Ministry of Finance Japan
Researchers Receiving a Salary from Tokyo Tech
Upon arrival in Japan, submit the following required documents to your department’s administrative office:
Required Documents
- Two copies of the Application Form for Income Tax Convention (Form 8 Relief from Japanese Income Tax and Special Income Tax for Reconstruction on Remunerations, Grants, etc., Received by Professors, Students, or Business Apprentices) printed on both sides and signed
- A copy of your passport (include pages showing your identity and dates of entry)
Researchers Receiving an Honorarium or Other Monetary Reward from Tokyo Tech*
After arriving in Japan, submit the required documents described below to the staff member in charge of your administrative matters (usually the laboratory secretary or departmental administrative office). Please request the staff member to include the tax exemption when inputting your payment data in the purchase order (buppin-seikyuu) system.
*Note: In cases where the Accounting Division determines that no personal services have been rendered in relation to the payment of travel expenses, per diem allowance, or accommodation allowance, withholding tax is not applicable, and tax convention procedures are not required.
Required Documents
- Two copies of the Application Form for Income Tax Convention (Form 7 Relief from Japanese Income Tax and Special Income Tax for Reconstruction on Income Earned by Professionals, Entertainers, Sportsmen, or Temporary Visitors) printed on both sides and signed For tax conventions with certain countries*
- Two copies of the Attachment Form for Limitation on Benefits Article, printed on both sides (Form 17, available from the National Tax Agency website)
- Certificate of Residence (original, prepared in your country of residence)
*Please refer to the above National Tax Agency website and see the “Attachment for Limitation on Benefits Article,” which lists the relevant countries.
Documents are downloadable from the National Tax Agency website.
Last updated August 8, 2023
