CLAIR does not specialise in tax matters. CLAIR takes no responsibility for the accuracy of the information contained herein, nor accepts responsibility for any financial loss incurred or any legal action taken against anyone (whether or not they are associated with the JET Programme) as a result of information contained in or omitted from this article.
JET participants live and work in Japan, and because they are working residents, they are liable for Japanese taxes. The specific liabilities for each JET participant will depend upon his/her Status of Residence and nationality. What follows is accurate as of January 2013. (All JET participants are strongly encouraged to read the country-specific information in the GIH)
yPersonal Income Taxz
Your tax status in Japan depends largely on your nationality, the length of your stay and your occupation in Japan.
It is important to note that first and second year ALTs from countries which have not concluded tax exemption treaties with Japan (i.e. UK, Canada, Australia, New Zealand, South Africa, Singapore, Turkey, Jamaica, Malaysia, Trinidad and Tobago, Barbados, Kenya, Peru, Mongolia, Austria, Argentina, Fiji, Tonga, Samoa, and Palau), all third year ALTs, and all CIRs and SEAs are liable for tax in Japan.
If you are paying tax in Japan, it is important to obtain a breakdown of your tax payments (Statement of Earnings) from your contracting organisation. This statement can be called either: gensen choshu ni kakaru shotokuzei no nozei shomei negai or kyuryo shotoku no gensen choshu hyo. If your visa type and nationality exempts you from paying Japanese taxes, the statement may also be called kyuyo shiharai hokokusho.
Tax matters in Japan require very little paperwork. If exempted from paying tax in Japan, you have to file a form that confirms exemption, and you may be required to fill out a questionnaire for your local tax office. You should also be sure to keep your gensen choushu hyo or Statement of Earnings (a small slip of paper which will appear in your December or January pay packet; see example in GIH p. 225), as it may be necessary for visa, tax and other matters. The gensen choshu hyo details your income, tax you pay and how much you contribute to Social (Health) Insurance and pension. JET participants who have to file tax returns in their home country need this, as do all reappointed JET participants who apply for an extension on their visa.
The gensen choushu hyo details all information valid within one calendar year (January to December) so first year JET participants probably will receive a statement only for income earned from August to December. However some contracting organisations treat the JET participant's income according to the JET year (from August to July the following year) and will prepare the gensen choushu hyo at the end of the JET year in June or July. If you need the gensen choushu hyo early for some reason or your contracting organisation cannot prepare it formally, ask for the same information written and stamped with your contracting organisationfs official seal.
yThe Tax Exemption Formz
Those JET participants eligible for tax exemption in Japan should make sure they fill out forms for tax exemption (examples in GIH). You can obtain these forms from your supervisor shortly after you arrive.
Tax exemption forms are produced by the Ministry of Finance. Some forms may have both English and Japanese (front and back) and some forms may have only Japanese. Both forms are valid, however the forms may have a slightly different layout. If you are unsure about your tax exemption form, compare it to the example forms provided in the GIH. If they are the same, the English translation should be as in the example.
For ALTs from the U.S., in order to be exempt from paying Japanese taxes, Form 6166 (certification of U.S. residency issued by the IRS), must be submitted together with the Tax Exemption Form. Please see Tax Information for US ALTs and the IRS website (www.irs.gov) for information on how to acquire Form 6166. ALTs from the U.S. are encouraged to acquire Form 6166 before coming to Japan.
Note: Those who are exempt from Japanese taxes are exempt for their first two years only. Those who stay on the JET Programme beyond this time will be required to pay Japanese taxes.
yLocal Inhabitant Taxz
JET participants who are liable for income taxes will likely be liable for inhabitant taxes also. Inhabitant taxes are calculated based on the previous yearfs income in Japan.
The inhabitant tax bill is delivered around June for the previous January to Decemberfs income. However, inhabitant taxes are generally not required in the calendar year in which you arrive, even in the case of first-year JET participants who are liable for Japanese taxes.are generally not required in the calendar year in which you arrive. So, if you arrived in July 2012, you will have inhabitant taxes due in 2013.
Contracting organisations generally handle payment of your inhabitant taxes in one of three ways:
EThey will make monthly or quarterly payments for you.
EThey will include the money in your gross monthly remuneration (JET participants who arrived in Japan prior to April 2011 only), and you will be responsible for using this to pay your tax bill in June.
EThey will pay the money in a lump sum in June when your tax bill comes.
It is very important to confirm whether you will be liable for inhabitant taxes, and if so which method of payment your contracting organisation uses. Otherwise, you may find yourself with a large inhabitant tax bill and no funds to pay it.
Inhabitant taxes are decided in accordance with your income, and vary from area to area. For JET participants who must pay taxes in Japan, your remuneration of 3,360,000 yen (first-year JET participants who arrived in April 2012 or later) is before income and inhabitant tax payments have been deducted.
The information above is accurate as of January 2013. CLAIR does not specialise in tax matters. CLAIR takes no responsibility for the accuracy of the information contained herein, nor accepts responsibility for any financial loss incurred or any legal action taken against anyone (whether or not they are associated with the JET Programme) as a result of information contained in or omitted from this article.