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Taxes

Taxes

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)

>> General Information Handbook

注意
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.
Personal Income Tax

Your tax status in Japan depends largely on your nationality, the length of your stay and your occupation in Japan.

注意
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 organisation’s official seal.

The Tax Exemption Form

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.

Local Inhabitant Tax

ET participants who are liable for income taxes will likely be liable for inhabitant taxes also. Inhabitant taxes are calculated based on the previous year’s income in Japan.

The inhabitant tax bill is delivered around June for the previous January to December’s 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:

  • They will make monthly or quarterly payments for you.
  • They will include the money in your gross monthly remuneration (JET participants who arrived in Japan prior to April 2012 only), and you will be responsible for using this to pay your tax bill in June.
  • They will pay the money in a lump sum in June when your tax bill comes.
注意
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.

US ALT Exemption

First and second year ALTs from the U.S. must obtain Form 6166 (certification of U.S. residency) from the Internal Revenue Service (IRS). This can be obtained by first filing Form 8802 (application for U.S. residency certification form), links to which are provided below. This form can be filed by fax or regular mail and can take up to 180 days to process. If you meet all the requirements your tax exemption Form 6166 (the actual certification) will be sent back to you. File Form 6166 together with the tax exemption application form obtainable at your local Japanese tax office. Once filed, the exemption will cover ALTs for their first and second year on the JET Programme. For specific questions about Forms 8802 and 6166 please contact the IRS. For more information about filing these documents at the local Japanese tax office please contact your Prefectural Advisor, supervisor, or your local tax office

Notes:

  • This filing has nothing to do with the filing of U.S. income tax. This is solely for the purpose of exemption from Japanese income taxes.
  • As the exemption from Japanese income taxes is only valid for two years, only first and second-year ALTs are required to have this paperwork on file with the Japanese tax authorities.
  • On Form 8802, the certification should be requested for the year prior to that in which the JET participant came to Japan on JET. For example, current first-year JET participants who arrived in July or August of 2012 would put 2011 for questions 7 and 8. New JET participants who are set to arrive in Japan in July or August of 2013 should request certification for the 2012 tax year. For all JET participants who lived in Japan or another country other than the U.S. prior to beginning their term on the JET Programme, please contact the IRS with questions about your residency certification request.
  • The address to be written on the form will be the your address in the U.S. during the time for which certification is being requested. In order for the form to be sent to you in Japan, you will need to provide your current address in Japan in the available space on line 3a.
  • The IRS charges a U.S. $85 user fee to process Form 8802. JET participants are responsible for bearing this fee.

Please use the following links to download the necessary forms and other related information. (All links are to IRS provided PDF pages)

>> Instructions for US Residency Certification PDF

>> Application for US Residency Certification (Form 8802) PDF

>> Links to other general information about income tax for US taxpayers overseas

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