Taxes In Japan & Living Comfortably

[Wwanderer]

Before taking Japanese citizenship and renouncing citizenship in your home country for tax reasons, I'd suggest thinking long and hard about possible downsides of having one's citizenship in a country which has historically defined itself so heavily by ethnicity and which has had periods of extreme nationalism and xenophobia. God knows I don't want to sound like @Solong ( ), but there still are today in Japan deeply xenophobic sentiments in some Japanese people and extremely nationalistic views in some quarters of the local political spectrum. While these are not serious problems for a gaijin Japanese citizen today, who can say what it will be like years and decades in the future? Changing your citizenship is a long term "wager". Moreover, many believe (including me and many who are in a better position than me to know) that xenophobia and nationalism in Japanese culture has been growing stronger gradually since the economic bubble burst. If you extrapolate that trend...

-Ww

 

[k1234k]

...deeply xenophobic sentiments in some Japanese people and extremely nationalistic views in some quarters of the local political spectrum.

How is that different from the typical 2015 era American?

 

[Goiter]

How is that different from the typical 2015 era American?

Great point. It's not and arguably much much less offensive than a lot of the rhetoric in America today.

 

[Solong]

What Solong is saying is somewhat accurate based on a taxable income of 10 million yen, which is markedly different from a gross salary of 10 million yen.

Keep in mind that basic deductions, dependents, insurance premiums, and social insurance contribution all reduce your taxable income, so that a gross salary of 10 million yen will usually result in a taxable income around 5.5 million yen at the national tax level, and the overall tax and social insurance burden on a 10 mil gross salary will be around 23-27%, depending on the number of dependents. To get to the point where your social insurance and tax liabilities equal 40% of your gross salary you would need to be making more than 30 million a year (and have a completely inept personal accountant).

If you want to work out your approximate tax burden, HTM (a local payroll company) has a relatively accurate though somewhat simplistic calculator on their site.

http://www.htm.co.jp/calculators-monthly-payroll-japan.htm

Again, you guys are pulling information off of the Internet, as oppose to talking with or going to the Japanese tax office, talking to Japanese accountants, looking at actual taxes and deductions on a pay stub in Japan (of yourself, Japanese girlfriends, or fellow expats)...

At or above 9,000,000 yen, 40% or more will be taken out and as I described earlier. For your tax and social insurance burden to be lower, it's usually because you make LESS. Like if you are only making 4,000,000.

Yes, you can get some of that money back, but that is often after a tax accontant helps, you are married, have kids, business deductions, etc...

 

[meiji]

Again, you guys are pulling information off of the Internet

I'd really like to know what your source is for Japan not issuing work visas to people making under 3M yen a year, because a) it's not a requirement for a work visa per the Japanese immigration site and b) I've seen jobs that certainly paid under that that offered visa sponsorship.

 

[Solong]

I'd really like to know what your source is for Japan not issuing work visas to people making under 3M yen a year, because a) it's not a requirement for a work visa per the Japanese immigration site and b) I've seen jobs that certainly paid under that that offered visa sponsorship.

Straight from the mouths of 2 immigration lawyers, and then confirmed at immigration. I won't go into details, but it was over hiring and issuing visas for people to work in Japan.

You didn't see a job that paid less than that, and they were issued a work visa for that job, because the person is required to support themselves. The only way around this, is if the company is providing "free housing and utilities", and this is factored in as part of their pay. Their pay can be less, because they aren't paying rent, transportation, etc... In this case, immigration is looking at the entire package of what's offered.

If you have a marriage visa, permanent residency, under a student visa... these are different. A working holiday visa (only 1 year and age limit for application) might also be a different circumstance.

You can work at a job that pays less than that 3M yen, as a second job or say if you are married because your spouse helps support you. Not saying such low paying jobs don't exist, but that immigration is not issuing you a work visa for them.

 

[meiji]

You didn't see a job that paid less than that, and they were issued a work visa for that job, because the person is required to support themselves.

Well, thanks for telling me what I didn't see. :\ Immigration is notorious for having rules which can be bent depending on who you are talking to.

 

[TokyoJoeblow]

It is said that it can be easier to obtain Japanese citizenship than permanent residency. You do NOT need to become a permanent resident first, but can apply for it directly. Japanese citizenship is possible after living in Japan for 5 years. However, they will: inspect your home, make sure you don't have any type of criminal past, make sure that you renounced the citizenship of your country, that you can support yourself, and give you crazy amounts of paperwork to fill out.

Another advantage of Japanese citizenship over permanent residency is that they supposedly have a 99% approval rate. Which is a bit shocking, but might be related to the issues they have with Koreans and Chinese living here, and trying to encourage them to become Japanese citizens. Many Koreans refuse to switch over to Japanese citizenship, because the Japanese government after WW2 forced them to take special permanent resident status or leave, and the history over it is a mess. More recently, there seems to have been a strong push to encourage Koreans to become Japanese citizens, though some right-wing groups rather they leave.

If you are an unmarried person on a work visa trying to obtain permanent residency, immigration is known to give people hell and there is a high application rejection rate. So, if you don't want to keep the citizenship of your country and rather renounce it, then becoming a Japanese citizen is an option. Do keep in mind though that you are still required to pay all Japanese taxes and enroll in the health and pension plans. There is no escaping that, but at least you won't have to deal with taxes for 2 countries at the same time.

I have read that for those on a Spouse of Japanese National visa, they can apply for permanent residency after 3 years of being married and living together with their spouse? Do foreigners with Japanese spouses also have to wait 3 years to apply for Japanese citizenship as well or is the wait longer?

Would I be able to avoid filing tax returns to the US if I obtain permanent residency or does this only apply to gaining Japanese citizenship?

 

[meiji]

Would I be able to avoid filing tax returns to the US if I obtain permanent residency or does this only apply to gaining Japanese citizenship?

You would only be able to stop filing tax returns in the US if you get citizenship in another country AND renounce your US citizenship (which Japan would ask you to do anyway).

 

[Solong]

I have read that for those on a Spouse of Japanese National visa, they can apply for permanent residency after 3 years of being married and living together with their spouse? Do foreigners with Japanese spouses also have to wait 3 years to apply for Japanese citizenship as well or is the wait longer?

Would I be able to avoid filing tax returns to the US if I obtain permanent residency or does this only apply to gaining Japanese citizenship?

My understanding is that you have to wait 5 years and be living in Japan, before you can apply for Japanese citizenship.

With permanent residency, if you are married, you can apply in 3 years but it does NOT mean they will approve of it. Quick approval is often in ideal situations, where you or her have lots of money and spotless legal records.

With many people, it took 5 years or more and applying multiple times. Immigration also is known to pay close attention to certain countries, be suspicious of fake looking marriages, money problems, or any legal issues.

There is nothing wrong with applying for it as soon as possible, but you might want to see an immigration lawyer and clarify what are your chances in your present situation or have them file the paperwork (but a bit expense) to increase your chance for approval. Among my friends, those that used immigration lawyers tended to be more successful getting approval.

 

[Expired Beef!]

Even if you renounce, if the IRS determines that you did it to avoid paying taxes, fines, and other interest, they can still come after you. Uncle Sam's reach is far and almost unlimited since they have leverage over many countries and their investments in the US.

 

[split]

True. The tentatacles of the IRS will still have consequences on renounced citizenship when there is a tax debt. For example Richard Ver recently was refused a visa to renter his former country due to this. And the lawmakers are pushing to make this last years after you've renounced. Fascist pigs. Worldwide, they have the highest success of tax rate collection (around 68% of all due taxes), yet they will stop at nothing to ruin the lives of their own people.

I could give you a story. In short, lawyers for the govt spend 60k on CSI-type ink forensics to prove a man cheated on his taxes by backdating the pen ink's chemical structure to the manufacturer, of which didn't exist at the time the person claimed he filed his paperwork. They actually spent more on the forensics than the tax and it's penalties due. This is not from the Internet but from a family member working in the legal field first hand. It's splendid to know your tax dollars, in this case are generating negative returns.

 

[Wwanderer]

How is that different from the typical 2015 era American?

Great point. It's not and arguably much much less offensive than a lot of the rhetoric in America today.

Basically there are strong similarities, and I would also advise anyone considering taking US citizenship and giving up their native citizenship for tax purposes to think very carefully about the long term implications, especially non-Caucasian people...same advice for the same situation in other words.

That said, there are also a couple of important differences I think.

One is that the US is unusually culturally and politically diverse while Japan is unusually homogeneous. So, for example, in the US you can have the first black President recently elected and the strongest by far ever female Presidential candidate in the race for the next POTUS at the same time that you have one of the most racist and nationalistic candidates in decades doing extremely well on the other end of the spectrum. For another example, some of the most sexually repressed and prudish sub-cultures in the First World and some of the most sexually open and permissive ones are important aspects of society in the US. It's an odd place.

Another important difference in this context is that the US has much greater ethnic diversity than Japan. Something like 30% of eligible voters in the US are members of minority ethnicities, and the fraction is increasing rapidly. What is that percentage in Japan? A few percent at most, I'd guess.

-Ww

 

[TokyoJoeblow]

My understanding is that you have to wait 5 years and be living in Japan, before you can apply for Japanese citizenship.

With permanent residency, if you are married, you can apply in 3 years but it does NOT mean they will approve of it. Quick approval is often in ideal situations, where you or her have lots of money and spotless legal records.

With many people, it took 5 years or more and applying multiple times. Immigration also is known to pay close attention to certain countries, be suspicious of fake looking marriages, money problems, or any legal issues.

There is nothing wrong with applying for it as soon as possible, but you might want to see an immigration lawyer and clarify what are your chances in your present situation or have them file the paperwork (but a bit expense) to increase your chance for approval. Among my friends, those that used immigration lawyers tended to be more successful getting approval.

As far as looking closely at criminal records when applying for permanent residence/citizenship, does immigration look mainly at your criminal history (if you have one) within Japan only or in your home country as well?

I wouldn't think that the US would be one of the countries they look too closely at, but who knows.

 

[Goiter]

Lots of good stuff here. I'd be keen to see the list of different prefectural/local tax rates by jurisdiction. Could someone please post a list in Japanese or English? It would be a big help to those of us with less experience in Japan. It might also help some folks in making a decision where to live. Thanks!

Looking forward to the list from one of the experts. We really need your help!

 

[KJos]

Looking forward to the list from one of the experts. We really need your help!

A quick search brought this up.
http://jigyou-tax.hajime888.com/j03.html

Apparently, Yokohama and Kawasaki tax the highest and Nagoya has one of the lowest. But it also says that there is not much difference between the highest and lowest and they are only slightly away from the standard 10%.

Also found a simple article with explanation of tax rates by income slab.
http://www.japan-guide.com/e/e2206.html

 

[Goiter]

My understanding is that you have to wait 5 years and be living in Japan, before you can apply for Japanese citizenship.

With permanent residency, if you are married, you can apply in 3 years but it does NOT mean they will approve of it. Quick approval is often in ideal situations, where you or her have lots of money and spotless legal records.

With many people, it took 5 years or more and applying multiple times. Immigration also is known to pay close attention to certain countries, be suspicious of fake looking marriages, money problems, or any legal issues.

There is nothing wrong with applying for it as soon as possible, but you might want to see an immigration lawyer and clarify what are your chances in your present situation or have them file the paperwork (but a bit expense) to increase your chance for approval. Among my friends, those that used immigration lawyers tended to be more successful getting approval.

Please, I beg you. Stop pulling this stuff out of your ass. For permanent residency, in principle
you need to be in Japan for 10 years to apply with 5 of those years consecutively on a work permit or residence visa.

I know your swinger pals are a better source of data than the MoJ/HoMuSho but maybe at least have a peek at the official information.

http://www.moj.go.jp/nyuukokukanri/kouhou/nyukan_nyukan50.html

 

[Goiter]

A quick search brought this up.
http://jigyou-tax.hajime888.com/j03.html

Apparently, Yokohama and Kawasaki tax the highest and Nagoya has one of the lowest. But it also says that there is not much difference between the highest and lowest and they are only slightly away from the standard 10%.

Also found a simple article with explanation of tax rates by income slab.
http://www.japan-guide.com/e/e2206.html

No. They are all 10% save two exceptions. Japan has a 政令指定都市/Designated Cities law which accords some special rights to cities and prefectures.

Nagoya city decreases their burden to 5.7% from 6.0%. Kanagawa prefecture raises their prefectural rate to 6.025%. This makes two locales slightly higher/lower than the rest of the country. The other thousands of city/prefecture combos are identical.

Read the article.

"その他の地域は税率が全て同じ"etc etc

Your second article is correct. Unfortunately the progressive taxation calculation appears to be beyond some people. For instance (ignoring deductions for health insurance, pension etc) income of 10 mil JPY implies a tax rate of 17.6%. If I had the energy to take the deductions first, it would be even lower.

 

[Solong]

Please, I beg you. Stop pulling this stuff out of your ass. For permanent residency, in principle
you need to be in Japan for 10 years to apply with 5 of those years consecutively on a work permit or residence visa.

I know your swinger pals are a better source of data than the MoJ/HoMuSho but maybe at least have a peek at the official information.

http://www.moj.go.jp/nyuukokukanri/kouhou/nyukan_nyukan50.html

Dude, no way you live in Japan, and please stop pretending that you know things that you don't. You are not reading what is posted, then pulling random stuff off the Internet as a response. TokyoJoeBlow is MARRIED.

. The requirement to apply for permanent residency, if married, is 3 YEARS.

And didn't say you are guaranteed of getting it that soon, but that you can apply.

. If you have a special HSP visa, you can apply after 4 and half years.

Almost guaranteed to get approval if all requirements are met.

. The site linked says 10 years of living in Japan with a work visa before applying for a permanent visa, BUT this is a general rule.

You may attempt to apply for permanent residency in 7 years, and I know for a fact beyond all reasonable doubt of people getting it in 8 to 9 years, who had work visas. Also, people who were under other types of visas in Japan, like: marriage, SOFA, student, etc... The time stayed continuously in Japan can be added to the present work visa, for purposes of the application. All except "tourist visa", and that time can't be used.

Also, time left on your present work visa is relevant. If you have around or less than 1 year left on the work visa, immigration won't process your application for permanent residency until you have renewed it. This is also why some people will submit earlier than the 10 years stated, depending on the total time left on their work visa. Like if they have 2 years left on the work visa, so submit, giving themselves possibly 2 chances for approval before it expires or needs renewal.

http://www.tokyoimmigration.jp/eng/eijyu.html
(immigration lawyer office)

 

[Expired Beef!]

It's not tax season so how did this all get started? It is "fuck season"! Let' talk tits and ass and vagina taxes. lol

 

[Goiter]

No. They are all 10% save two exceptions. Japan has a 政令指定都市/Designated Cities law which accords some special rights to cities and prefectures.

Nagoya city decreases their burden to 5.7% from 6.0%. Kanagawa prefecture raises their prefectural rate to 6.025%. This makes two locales slightly higher/lower than the rest of the country. The other thousands of city/prefecture combos are identical.

Read the article.

"その他の地域は税率が全て同じ"etc etc

Dude, no way you live in Japan, and please stop pretending that you know things that you don't. You are not reading what is posted, then pulling random stuff off the Internet as a response. TokyoJoeBlow is MARRIED.

. The requirement to apply for permanent residency, if married, is 3 YEARS.

And didn't say you are guaranteed of getting it that soon, but that you can apply.

. If you have a special HSP visa, you can apply after 4 and half years.

Almost guaranteed to get approval if all requirements are met.

. The site linked says 10 years of living in Japan with a work visa before applying for a permanent visa, BUT this is a general rule.

You may attempt to apply for permanent residency in 7 years, and I know for a fact beyond all reasonable doubt of people getting it in 8 to 9 years, who had work visas. Also, people who were under other types of visas in Japan, like: marriage, SOFA, student, etc... The time stayed continuously in Japan can be added to the present work visa, for purposes of the application. All except "tourist visa", and that time can't be used.

Also, time left on your present work visa is relevant. If you have around or less than 1 year left on the work visa, immigration won't process your application for permanent residency until you have renewed it. This is also why some people will submit earlier than the 10 years stated, depending on the total time left on their work visa. Like if they have 2 years left on the work visa, so submit, giving themselves possibly 2 chances for approval before it expires or needs renewal.

http://www.tokyoimmigration.jp/eng/eijyu.html
(immigration lawyer office)

Busted! I live in my parents basement in Des Moines, Iowa.

Well, you pretty much know everything about everything in Japan. I just hope that someday I can visit. Maybe after I finish high school.

 

[Sudsy]

Again, you guys are pulling information off of the Internet, as oppose to talking with or going to the Japanese tax office, talking to Japanese accountants, looking at actual taxes and deductions on a pay stub in Japan (of yourself, Japanese girlfriends, or fellow expats)...

At or above 9,000,000 yen, 40% or more will be taken out and as I described earlier. For your tax and social insurance burden to be lower, it's usually because you make LESS. Like if you are only making 4,000,000.

Yes, you can get some of that money back, but that is often after a tax accontant helps, you are married, have kids, business deductions, etc...

Actually, as you may have guessed from my previous posts, I work in HR consulting, and we deal with payroll issues quite frequently. I quite frequently have to break down and explain deductions to expats who are working in Japan for the first time.

If you are making 10 million per annum as your total remunerative package and having 40% deducted from your gross pay, something is not right - your total deductions should not exceed (approximately) 27% - assuming you are single with no dependents, rent accommodation in Tokyo, have a commuting allowance under 50K, and are over 40.

If you have seen a pay stub from someone making 10 million per annum with 40% deductions on it, then it's quite likely that you missed a benefit - the person in question may, for example, have had a large commuting allowance - we had a client company in the past whose head of marketing commuted daily to and from Tohoku by shinkansen, which counted as nearly 500,000 yen of taxable benefit. Company provided housing can also be counted as a taxable benefit as well, and can significantly increase your tax liability.

 

[NormalGuy]

I can confirm exactly what Sudsy is saying, being that exact demographic and currently having deductions around 25%

I let payroll sort out everything, and they seem to know what they are doing.

 

[meiji]

If you are making 10 million per annum as your total remunerative package and having 40% deducted from your gross pay, something is not right - your total deductions should not exceed (approximately) 27%

Are you including health insurance and pension costs? Because I think Solong was.

Let's say you make 10,000,000 yen (100,000 dollars in a 1 to 1 yen to dollar exchange) a year:

20% will be taken as income tax
5% to 10% will be taken as inhabitant or local taxes (equal to city and state taxes, depends where you live)
5% will be taken for national health insurance (can be more in some cases)
9% (approximately) will be taken for pension insurance (equal to social security taxes)

That will usually be 40% or more of your money

 

[just4fun]

Dude, no way you live in Japan, and please stop pretending that you know things that you don't. You are not reading what is posted, then pulling random stuff off the Internet as a response. TokyoJoeBlow is MARRIED.

. The requirement to apply for permanent residency, if married, is 3 YEARS.

And didn't say you are guaranteed of getting it that soon, but that you can apply.

. If you have a special HSP visa, you can apply after 4 and half years.

Almost guaranteed to get approval if all requirements are met.

. The site linked says 10 years of living in Japan with a work visa before applying for a permanent visa, BUT this is a general rule.

You may attempt to apply for permanent residency in 7 years, and I know for a fact beyond all reasonable doubt of people getting it in 8 to 9 years, who had work visas. Also, people who were under other types of visas in Japan, like: marriage, SOFA, student, etc... The time stayed continuously in Japan can be added to the present work visa, for purposes of the application. All except "tourist visa", and that time can't be used.

Also, time left on your present work visa is relevant. If you have around or less than 1 year left on the work visa, immigration won't process your application for permanent residency until you have renewed it. This is also why some people will submit earlier than the 10 years stated, depending on the total time left on their work visa. Like if they have 2 years left on the work visa, so submit, giving themselves possibly 2 chances for approval before it expires or needs renewal.

http://www.tokyoimmigration.jp/eng/eijyu.html
(immigration lawyer office)

And when you apply for permanent residency......make sure that on your essay that you write something that the immigration office will approve.....if they don't like your reason for staying here you'll be turned down (FACT)