Hi Gaijinhan, this is SH.
Its been a long time, how are you?
I am now working in Fukuoka, Kitakyushu City, under X since June this year.
So far, I have mixed feelings about the experience.
I found that the cons of teaching in Japan way outweigh the pros.
While I was offered a certain monthly salary, after rent, income tax, insurance and pension deductions, I actually receive less than half of my monthly salary as disposable income. This remaining amount is barely a live-able figure to last you til your next paycheck. This was one crucial info that my company has conveniently avoided to inform us about.
I realized that I am actually paying much more tax than some of my ALT colleagues. My monthly income tax is close to 46,000 yen while some of them only pay a few thousand yen. It appears they are paying considerably lesser because they have tax exemption because they have dependents.
I also have aged parents back in Singapore and I asked my company on the possibility of getting myself on tax exemption as well.
But it has been 2 weeks since I first enquired about this, and there is still no update from them.
My company is very much under-staffed, they only provide minimal support to facilitate you working at the schools. Whatever other concerns you might have are not on their priority. So I am compelled to seek out this information for myself.
I like to ask you about your understand on Japan’s income tax system, about tax exemptions for dependents, particularly for foreigners in Japan.
Please provide me with advice on how to apply for any of the tax exemptions if possible. And for any prior income tax I have paid for without the exemption, will it be claimable?
I will appreciate it if you can share any information you might have.
Many thanks and regards,
SH
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Hi SH,
I hope I didn’t miss out any parts that I should censor. I’m actually quite envious of you in that I’ve always wanted to live in Fukuoka, but yet had the chance or maybe I did have the chance but didn’t make the move when I was doing freelance work last year. I will try my best to offer what I know from my short 5.5 years here regarding getting your tax returns.
While I don’t know how much you are paid, it’s normal for insurance, pension, and income tax to take up close to 50,000 yen of your salary if you’re making around 250,000 yen. Since you’re in Kitakyushu, I suppose rent should be cheaper since the city’s finances are among the worse ones in the country and property prices are relatively low. When you mean less than half disposable income, do you mean after rent, utilities, and bills are paid for?
I’m not certain about your other colleagues’ situation but even if you’re not getting as much tax exemption from having dependents outside Japan, you can apply for tax returns during the year-end adjustment (or 年末調整). I was fortunate my previous company was responsible enough to ask me about it and submitted on my behalf but if required, you can prepare your own Japanese and English documents, get your parents to sign them and bring your tax withholding slip (源泉徴収票) together with it to the tax office during the adjustment period.
Below is a sample of the documents I submitted to get my tax returns.
English Version
I, <parent’s name>, NRIC No. <parent’s I/C number>, hereby acknowledge that I have received a sum equivalent to approximately <amount you give your parent in a year> Japanese yen from my son, <your name>, Residence Card Number <your residence card number>, in <year>.
Signature: <parent’s signature>
Date: <date of signature>
Japanese Version
<parent’s name>(国民登録管理カード番号:<parent’s I/C number>)は、 長男<your name>(在留カード番号:<your residence card number>)より、 <year>年に合計約<amount you give your parent in a year>円に相当する金額を受領したことを認めます。
署名:<parent’s signature>
日付:<date of signature>
Note that in the Japanese version before “<your name>” it says 長男 because I am the only son in the family (I have an elder sister). If you’re the second son or third son, change it to 次男 or 三男 respectively. Or for ladies who are using this, don’t forget to change “son” to “daughter” in the English version and 長男 to 長女 or 次女 or 三女 depending on how many siblings you have.
I can’t remember how much I received in return but it appears that I only had to submit once because last year, when I did my own taxes as a freelancer, I noticed that the system had the record of my dependent in Singapore so I didn’t have to fill it in again.
Hope this helps!
http://www.nta.go.jp/taxanswer/shotoku/1180.htm
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Apparently there are a few types of dependents and elderly dependents have to be more than 70 years old on the last day of the calendar year. Nevertheless, for non-spouse “general” category dependent, it is a 380,000 JPY deduction off your taxable income provided that the dependent has less than 380,000 JPY declared income that year or less than 1,030,000 JPY in the case that he/she’s only source of income is through a monthly salary.
http://e-kyu.com/muryou/tedori.html
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Calculate your monthly take-home pay. There is a field for city tax. You start paying this from June the second year onwards.
http://www.zeikin5.com/calc/
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Calculate your city tax here by filling in the fields in yellow (if applicable). Copy the monthly city tax deduction into the second website to estimate your take-home pay from the second year’s June onwards.
Hope it helps. Sorry the sites are all in Japanese.
While I only understand 50% of what Victor indicated in his post, but what I gather is that, if my parents are not 70 years old yet, or if they do not earn an annual income less than 1,030,000 JPY..
Then I won’t qualify for tax returns?
Still eligible in the below two scenarios.
1. Parent has a job: Income from job in a year is less than 1.03 million yen
2. Parent does not have a job: Total income (all sources such as CPF payouts etc) is less than 380,000yen a year.
Uh huh, but since my parents are not in Japan, but in sg, how does the Jap tax authorities verify whether my parents are working / or are earning any income lesser than 380,000 yen?
So, as long as my parent is earning less than 380k, 380,000 yen will be given back to me as tax returns?
Just to be clear, you will not be receiving 380,000 JPY. This is not a tax return as defined in the US.
What we are talking about here is a tax refund/rebate. It means a deduction on your taxable income. Something like the deduction you get for serving NS when you submit for your details for income tax to IRAS in Singapore.
Hi Si Han, sorry for the delayed response. I’ve removed the comment containing your email address, and will try to reply to the original 10 questions as simply as possible.
1) Do you need to get both of your parents, each of them to write 2 letters? One in English and one in Japanese?
– They are not too strict about this so you can submit whichever way you want.
2) Where do you bring these documents to submit? Is it the local ward office?
– No, you should bring it to the local tax office which is typically located at a different place.
3) What is the maximum amount (in terms of Japanese yen) that you can declare for tax returns? Is there any table or formula for this?
Say for example if the maximum is 200,000 yen per year, so do you have to get each of your parents to indicate that they each receive 100,000 yen yearly?
– I don’t have a clue about the maximum amount, and perhaps you might have gotten some insights from Victor’s replies already. But unless you intend to report a fallacious amount, you can just submit the amount of money you really did send your parents, and the tax office will cap the returns on the limit.
4) Do the tax dept in Japan actually verify your request for tax returns? Like for example, calling your parents, calling your bank, checking your financial records all that?
– I believe only if it is an enormous amount or if your tax history is egregious, they won’t manually verify.
5) Do you need to submit any supporting documents besides your parents’ letters and the tax withholding slip? Do you need to provide any bank transfer statements? Parents’ IC, their marriage certificate, your birth cert, etc?
– No, I didn’t submit anything else. What I wrote in the post is what I submitted.
6) How and when will you know whether your tax return request is approved? How do you know how much will the tax return amount be?
– The tax office will send you a letter informing you of the amount returned.
7) In what form is the tax return dispersed to you? Do they go through your company, or they provide you a cheque, or they credit your bank account?
– They would typically credit it back to your bank account.
8) Is the tax return given to you in one go or it is by monthly installments?
– One go.
9) If you have any changes in income or how much you provide your dependents in the future, what do you have to do?
– Resubmit during the next tax filing period.
10) Lastly, since my tax is currently withheld by my company, naturally they will be the ones declaring my income tax status to the tax dept, do I have to go through them to file the tax return?
– You can go through them. But I believe you can also do it yourself. Every company has to give the tax withholding slip to their employees around February every year. So you can use that to file.
Thanks Victor and Gaijinhan for your replies.
Those are really valuable insights and something I will never ever be able to figure out on my own. Just goes to show that my own countrymen are dependable even when you are overseas.
What I understand now is that they have a cap on how much to return based on a range of how much you contribute to your dependents.
Victor mentioned about the cap. on tax returns is based on your parent’s income of whether it exceeds 1.03 million yen per year.
But what I am not sure is that, since I got 2 parents, does that mean it is possible that I could declare a figure of close to 2 million yen (1 million yen for each parent) as contributions to dependents for tax return purposes?
And by the way, if you are married, does contributions towards your parents in law also constitute dependent support, and you can claim tax returns for that as well?
If so, does the same 1 million yen rule apply as well?
Hi Gaijinhan,
I stumbled by your blog while searching for information on tax refunds in Japan. I’m so glad to found your blog! I am also a Singaporean living in Japan. We might have probably met during some events held by the Singapore embassy.
I have a couple of questions to ask you about dependent tax refunds. As my brother will be entering university soon, I would be supporting him with a proportion of my salary. This will be my first time applying for the dependent tax refund. From what I’ve read online so far, it seems like there is a need to submit documents for verification purposes such as the ID with home address and also evidence of remmitting money back home. I heard from my colleague (foreigner but different nationality) that there is a separate form that I need to fill in . I’m not sure what exactly he was referring to and I would like to seek your experience in filing that form which I’m unclear of. From my understanding, that form is required as of 2016.
Hi Gene,
Pardon the very late reply as I had been busy preparing for my trip back home and then it’s another few days of visiting relatives. Finally gotten down to this.
I’m pretty sure we’ve never met at any of the events held by the Singapore embassy because I’ve never attended any of those. The post I read was valid up till the new system took place. Yes, your friend is correct, there should be a separate form for you to fill. However, that should be informed to you by your company who is doing your year-end adjustments for you. They should be giving you two forms, one of which should be a form for you to fill in your dependent information. Apart from that, you will also need to submit the verification and evidences you mentioned.
As the companies that were doing it for me gave very tight deadlines, I didn’t submit dependent information for my last two tax adjustments, which is silly if you think about it since I end up paying more taxes than I should.
If you’re not sure, bring the forms given to you by your company to your HR and ask them how to fill in.