Topics | Yurakucho CPA Office (Ginza, Tokyo, Japan)

You overpaid taxes?

If you are not familiar with Japanese tax law, we reccomend you check if you paid correct amount of taxes. In some cases you need to file a tax return to get a refund.

You overpay taxes without knowing it.

In some cases you overpay taxes as Japanese tax law requires.

For example, you are an employee and work for a company in Japan, and withholding taxes applies to your employment income. As you may know, withholding tax is deducted from your salary payment and it is paid by your companies to the tax office. Actually, the amount of withholding tax is estimated amount so your companies make 'Year-end adjustment' in December to determine your final tax amount (generally, amount of withholding tax is more than the amount you are actually required to pay, so most people get a tax refund in December.) . In other words, your companies can file your tax return for you (Japanese law requires companies to do so). However, in some cases it is not possible that your company makes this adjustment.

  • If your annual salary exceeds JPY 20,000,000, your company cannot make 'Year-end adjustment' so you need to file a tax return by yourself (probably get a refund).
  • If you work for more than one company, you (your 'second' company) may overpay taxes as Japanese law requires. There are roughly two ways of calculating withholding taxes, called 'Kou' and 'Otsu'. Basically, withholding tax amount calculated by 'Kou' is lower than the amount calculated by 'Otsu'. If you submitted certain document (relating to your dependents) to your 'first' company, the company calculated your withholding tax by 'Kou' (if not, 'Otsu' is used'), but you can submit it to only one company. That is why your 'second' company may use 'Kou'. However, this is not about your final income tax (this is a rule about withholding tax) so you can file a tax return and get a refund.

      • You purchase a property? Chance to get a refund.

      If you purchased a property (an apartment, etc...), you may be aware that you needed to pay for many kinds of expenses such as legal fees, registration fees, brokerage fees, etc. So for the first year, your property business may have a loss. This does not mean you do not have to file a tax return because you may have a chance to get a refund (tax returns are required if you want a refund). If you are an employee for a company, your employment income can be reduced by a loss incurred from property business (it is very hard to calculate a loss unless you are familiar with Japanese tax law).

      In addition to 'Aoiro Return', there are many ways to reduce your taxes. One of the best ways to do is to reduce your taxable income. We recommend you pay attention to any expenses which may be relating to your business.

      (Taxable income is generally described as 'Gross income minus business expenses or deductions'.)