Does Japan have an IRS?
 

So, as we may all know, the US Federal Government taxes income --- with is overtly unconstitutional. The Federal Reserve System is unconstitutional and has maxed out the national debt and bankrupted the American government (and dollar).


Is the same thing going on in Japan? Is their IRS system as blatantly corrupt?

I'm sure they are corrupt. Blatant, no. They are very sneaky about it. If any Government official gets caught doing something wrong, a subordinate is blamed and after apologizing (with many bows) , the matter is forgotten.
I was charged taxes on my income on my monthly check. Then every year I paid a tax for living there. Even though I left before the year was over,I had to pay the full year's amount before I was allowed to leave Japan. Funny thing was no one could ever explain these "taxes" to me.

I don't know much about Japan's case but there was a very serious event 2 years ago that shook the whole government's money flow: Scandal over lost pensions may be the final straw for ruling party - Times Online

Thank goodness that the (ironically anti-Japanese) LDP is crashing down faster than a sick bird.

I paid taxes, but then got the money back after I moved back to Japan (that might have been like Social Security...not sure)

I would like to see the law that states we have to pay income tax.


They only go off of the 16th amendment, which wasn't properly ratified and was referring to corporate income.

I hope Japan hasn't adopted the same corrupt ideals.

Search Aarron Russo (not sure off the spelling). He was the producer for the Bette Midler movie "The Rose". He did a film about it before he died.

My boss has that movie, I may have to borrow it.

Thanks :vsign:

Of course Japan has an equivalent of the IRS- the 税務署 (zeimusho) or tax office, and there is a Ministry of Finance which deals with monetary policy. Not being an American, I know very little about your system, so I can't comment on whether it is "as corrupt as the IRS".

Japanese income taxes are insanely LOW. About 5% if you make 1senmanen or less. That's 100,000USD folks. In the states you'D be lucky to take home 60K of that. The problem is cost of living is skyhigh if you live in the city and like to use highways, eat meat and fruit etc. The reason there are so many expats here is the J-gov lets you keep most of your pay.

It'S amazing how much a government can save when you don't have to pay for 11 aircraft carrier battle groups, overseas military bases, etc.

Local taxes are however rising quickly, and will eventually be on par with western countries by the time we all retire.

Income tax is low, but, like in western countries, there are lots of invisible taxes which you don't often see.

If you drive a car, then you are going to pay lots of tax, more than 50% the price of gasoline consists of tax, plus there is a tax which is levied on the size of the engine in your car. That tax alone on my car (with it's 6 liter engine) would cost more than $100 per month. This is in addition to the inspection tax which must be paid every 2 years. Adding highway tolls (which is another form of tax) makes owning a car in Japan an expensive venture.

Residency tax is a killer. Most foreigners are unaware of this tax, it doesn't apply to people who live in the country for 1 year or less. In my area it runs about $1200 a year. My girlfriend lives in a high-end Tokyo neighborhood, her residency tax is about $7000 per year.

Sales tax is 5%, but applies to everything. Pension tax is not expensive, far less than what they charge in American for Social Security. I pay about $60 a month into the national pension plan. If I leave after 3 or less years, the money I pay into the pension plan will be refunded to me.

Good points there Sangetsu, if you live frugally you can avoid lots of the hidden taxes.

But I have to say 6liter engine???OMG what in the hell are you driving , a tank? What number plate is that beast???

i think i paid 23.5 % last year in income and resident tax, pension and insurance, with a substantial deductible. at least more than many european countries.

whether the 財務省 is corrupt or not, i wouldn't know. i don't think japan is really debating whether or not the government has the right to tax its residents. please be aware that some taxes are not handled by the tax office. neither was the tax office responsible for the loss of pension records.

In the taxes you mentioned, I probably paid about 9%. It shows the difference between life in the inaka and life in the city. Which is better, is up for you the reader to decide. Still 23% is not bad.

The resident's tax is based on how much you earn, although there are slight variations between areas. Not everyone in Sangetsu's area will be paying $1,200, and not everyone is his girlfriend's area will be paying $7,000. It's a percentage of your income- where I live, close to 8%.

I disagree that most foreigners living in Japan are unaware of the resident's tax. Many of those who arrived in the last year, perhaps. The rest of us are very aware of it, since we have to pay it every year.

Those foreigners who stay one year or less are exempt from residency tax, and most foreigners do, in fact, stay 1 year or less.

The percentage you pay is not entirely based upon your income, but relies also on your geographic location. The rates are often higher in the countryside than they are in the city in order to compensate for having a smaller tax base.

I think you are perhaps thinking of English-speaking foreigners when you say that most foreigners stay less than a year. The majority of foreigners in Japan are from China and Korea, and they are long-term residents. I don't even mean those who were born in Japan but still hold foreign nationalities- the number of immigrants from those countries vastly outnumber those from western countries.

This is based on statistics I have seen regarding numbers of immigrants from each nationality, but I may be wrong- can you point me towards some statistics which show that most foreigners stay a year or less?

I realise that depending on the area the resident's tax varies by up to a few percentage points. It is not as simple as "people in one area pay $1,200 while people in another pay $7,000" though- a system that charged people from some areas 5 times more than those in others would obviously be unworkable.

The main factor in the amount of tax is the person's income.

Wow, how I wish we only had to pay 5% in income tax. How great that would be!!

In reality, we pay much much more. It`s just split into multiple categories. You get gouged all the same.
I have my husband`s pay slip right here. While I don`t want to go into details on how much he earned, I`ll list percentages and flat costs.
Last month;
2.5% for healthcare
6.5% for social security
0.5% for "general security"
1.5% for "income adjustment"
3.0% for residential tax

A total of 14% taken directly from the paycheck.
We also pay 5% from the yearly income in property tax and another 5% for income, which is paid in a yearly bundle except for overtime and bonuses (they are paid as "adjustment"). For our summer bonus, 7.5% of it went to income taxes. I THINK that overtime is also calculated on a different scale but really am not sure.

So, I`d say between 23~25% regularly.

The residents tax, by the way, has little to do with your income. It is MOSTLY based on the value of the property where you live. Live somewhere with pricey property, then it`s going to be a lot higher than if you live out where land is cheap.

Personally, I don`t have any issues with the taxes as the level of government provided services matches the amount. If they were just sucking the cash away and not doing anything with it, I think I`d feel differently though.

Are you sure?!!

Anyway, here is a pretty basic overview of the Japanese income tax. Japan Tax Laws Tax System Japan. - WorldWide-Tax.com

Great info there noodle! But........that is all if you are a salaried employee of a company, corporation, government. If you don't fit these catagories you get away with....your money. Sorry I didn't clarify that in the beginning.

Still income tax, only is 5%

If you make less than 1,950,000 yen, apparently. That`s quite a bit closer to $20,000 than $100,000.

You said it yourself 5% for income, yes all the others add up to 25%, The site noodle linked to lumps everything together. If you are self employed you don't pay that much, and you can deduct tons. I've only had to pay 2 years, and that isn't much.

I just calculated based on my husband`s pay slip from last month. :D I don`t have the yearly one on hand to check with.

I'm sorry to disagree with you here as you provide a lot of great info on this site, but it has quite a lot to do with your income. A search on the internet has just confirmed that for me- here is some info from just one page: "Resident tax should be paid to the municipality where you live (as of January 1) during the period from June to May. The tax amount is calculated according to your previous year's income."

I know from my own experience that with the years I earn less (I sometimes do extra temp work, but the amount varies), I pay less resident's tax the following year.

I also know that my friend's husband, who is a highly paid executive, pays many times more resident's tax than I do, despite living in the same ward. How could they charge people with very different incomes the same amount? It just wouldn't work.

As I said above, the percentage you pay will vary by a few percentage points depending on where you live, but how much you pay is based largely on the previous year's income. That's how they calculate it.

But the rate varies also according to your location, it is not solely dependent on income.

Yep, we are in agreement there. The rate depends on where you live, but the actual amount you pay is based on your income, therefore people living in the same area will pay very different amounts. To say that your income has little to do with how much resident's tax you pay is inaccurate- it is a major factor.

I didn`t say income had nothing to do with it - but in our experience location changes it 10x more than income.
When we jumped from pretty much 0 income (students with parents paying for housing) to $3000/month income - our residential taxes went up by a whopping 8000/year. (158000/yr vs 150000/yr)
When we moved, it doubled.

Of course income is going to have an effect, but it`s NOT the biggest deciding factor. That`s location. All income will do is make it fluctuate within the already set area... Which isn`t that big of a thing.

If you only look within one area, yes, your income has everything to do with it. But if you look at the entire country it has very little...

Do you see what I was trying to say?

Sure, I see what you are saying. I pay a higher percentage now than I did when I lived in Saitama, certainly. From your previous posts though, people who didn't know about the system might come away with the idea that the tax is a fixed amount based on the area you live in (i.e. not related to income), which is far from the truth.

I think we've cleared it up now!