KYOTO CITY INTERNATIONAL FOUNDATION

Ⅲ Necessary Information for Daily Life

5. Taxation and Insurance

5-1 Main Types of Tax

Like all Japanese, foreign residents must pay tax.

Tax is classified into two major groups, National Tax and Local Tax (Prefectural Tax, and City, Town and Village Tax).

Income Tax (National)

This tax is imposed on personal income. The amount of income tax you must pay is determined by applying a tax rate to the amount remaining after allowable deductions have applied to your yearly wages. If you are employed, your company will draw a certain amount of tax from your monthly salary and pay it for you.

Consumption Tax (Including local consumption tax)

There is a 5 percent tax imposed on all goods and services you pay for. Prices including consumption tax are marked “内税” (uchizei) and prices not including consumption tax are marked ”外税” (sotozei).

Residence Tax (Municipal and Prefectural Tax)

This is a local tax based on your previous year’s income, imposed by your place of residence on January 1.

Taxes on automobile purchases

The term “automobile” refers to all passenger cars, trucks, buses, etc. Automobile tax, automobile acquisition tax, motor vehicle weight tax and consumer tax are all imposed. Automobile tax is imposed every year on April 1 on anyone owning a car. The automobile weight tax is imposed at the time of car inspection.

Light Vehicle Tax (Municipal Tax)

Light Vehicle Tax is imposed every year on April 1 on anyone owning a light vehicle. A light vehicle is any light-weight car, motorized bicycle, or two-wheeled compact vehicle.

Property Tax (Including City Planning Tax)

A municipal tax on any land or house you own.

◆ What is the year-end adjustment? (For people working at a company)

A certain amount of tax is deducted from your monthly income. The total amount of tax you are required to pay may not necessarily be equal to the amount withheld by your employer. In such a case, the difference or amount adjusted is called a “Year-end Adjustment” (Nenmatsu-Chosei). Your employer will calculate the year-end adjustment.

◆Filing an Income Tax Return (For part-time workers, etc.)

This system (Kakutei-Shinkoku) requires you to calculate the amount of tax you must pay based on your total annual earnings (from January 1 through December 31). You must file your income tax return with the tax office in your area between February 16 and March 15 of the following year. You will be required to pay tax at the office where you filed your return. Income tax return forms are distributed at local tax offices. (English forms available) You can also download forms from the National Tax Agency homepage. http://www.nta.go.jp/category/kakutei/kakutei.htm

5-2 Main Types of Insurance

◆Social Insurance System

The social insurance system provides financial support to members and families who have experienced sickness, injury, disability, death, old age or unemployment. The social insurance system is divided into “Social Insurance” and “Labor Insurance”, and is managed by the Ministry of Health, Labor and Welfare.

◆ Labor Insurance

Worker’s Accident Compensation Insurance (Labor Accident Insurance)

Workers and the families of workers who have been injured at work, have become sick, have died from overwork, died while commuting to work or have committed suicide because of working conditions, receive benefits such as medical treatment, time off of work, and disability compensation, provided they meet certain requirements. Foreign workers are eligible for all benefits.

FLabor Standards Inspection Office with jurisdiction over your place of work

◆Unemployment Insurance

Unemployment insurance provides benefits to unemployed workers for general living expenses while they are seeking stable employment. As a rule, even entrepreneurs who are self-employed should sign up for unemployment insurance. The company and the individual each bear a proportion of the insurance premiums. Foreigners who have permanent residence, are spouses of Japanese, or have immigrated to Japanare eligible. Those who will be employed for a temporary period or who clearly will return home upon the termination of employment do not usually get unemployment insurance.

To receive unemployment benefits, you must have been insured for a minimum of 6 months in the last 12 months prior to your termination, you must show that you are actively seeking re-employment and have the ability to work.

FLocal Public Employment Office

◆Social Health Insurance

Social health insurance provides necessary medical benefits, treatment expenses, and ensures the stability of the lives of injured and sick workers and their families. All corporate bodies are obligated to join in this program. The company and the worker are each responsible for half of the premiums. FSocial Insurance Office with jurisdiction over your place of work

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