- October 15, 2023
- Posted by: Aki Kojima
- Categories: Individual & Self-Employed, Loan
Understanding the process and importance of obtaining tax certificates in Japan is crucial. Tax certificates play a significant role in various situations, whether for personal financial management or compliance with legal requirements on the issuing side.
- 1 Overview of a tax certificate in Japan
- 2 Aspects of the Tax Certificate in Japan
Overview of a tax certificate in Japan
In Japan, tax certificates, also known as “Shotoku Shoumeisho,” are official documents issued by the municipality. These certificates provide proof of tax payments and detailed information regarding an individual or business’s tax obligations. Different types of tax certificates are available, such as the Certificate of Income Tax(Shotoku Shoumeisho), Certificate of Residence Tax(Nouzei Shoumeisho), Tax Filing(Kakutei Shinkokusho), and tax withholding slip(Gense Choushu Hyo), among others.
Individuals can apply to the local municipality or through a convenience store. The application process typically requires providing a My Number Card and specific details regarding the type of certificate requested.
Importance of a tax certificate in various situations
Tax certificates are essential for a variety of situations, including:
- Income verification: Tax certificates can be used as proof of income for loan applications, visa applications, rental agreements, or other financial transactions. Lenders, landlords, or immigration authorities often require these certificates to assess an individual’s financial stability.
- Tax compliance: For businesses, tax certificates are crucial for ensuring compliance with tax obligations. They provide evidence that the company has fulfilled its tax responsibilities, such as corporate tax payments, consumption tax, or withholding tax payments.
- Benefit eligibility: Some government and social welfare programs require tax certificates to determine eligibility for certain benefits or subsidies. These certificates verify an individual’s income level and can impact the support they receive.
- Business transactions: In commercial transactions, counterparties may request tax certificates as part of their due diligence process. They assure the business is financially stable and compliant with tax regulations, fostering trust and confidence in the transaction.
In summary, tax certificates in Japan serve as proof of tax payments and obligations. These certificates are essential for income verification, tax compliance, benefit eligibility, and business transactions. Individuals and businesses alike should be aware of the process and significance of tax certificates to ensure compliance with legal requirements and meet various financial needs.
Aspects of the Tax Certificate in Japan
When obtaining a tax certificate in Japan, it is crucial to understand the different types of certificates available.
One of the most common certificates is the Certificate of Income, known as “Shotoku Shomeisho.” This document certifies your resident status and is essential for:
- Housing Loans
- Child Allowances
- Public Nursery School Admission
- Scholarships/Educational Funds
- Public Pensions: Needed when claiming pensions at age 60)
- Other Situations: UR housing, Tokyo Silver Pass, and metropolitan housing applications.
In addition to the Certificate of Residence, there is the Certificate of Residence Tax Certificate (Juminzei Kazei Tuchisho). This document verifies your resident tax amount because your municipality calculates it.
The Certificate of Tax Filing (Kakutei Shinkokusho) is for self-employed or business owners. This document proves that you have filed your taxes correctly and on time. It may be required when seeking business partnerships, applying for loans, or participating in tender contracts. It demonstrates your financial responsibility and compliance with tax regulations.
Lastly, there is the Certificate of Gensen Choushu Hyo, which provides information about the amount of taxes withheld from your income by your employer. This certificate may be necessary when filing taxes or applying for certain benefits or exemptions.
Understanding the importance of the different types of income certificates can help you navigate various administrative procedures smoothly and ensure compliance with tax regulations in Japan.
Process of Obtaining Tax Certificates in Japan and Residence Certificates in Japan
Steps to obtain Certificate of Income Tax(Shotoku Shoumeisho) or Certificate of Residence Tax(Nouzei Shoumeisho)
At the City Hall (Shiyakusho)
Here are the steps to follow to get an income certificate in Japan:
- Step one: Visit the City Hall (Shiyakusho)
- Step two: Fill out the form – Request the required form at the City Hall. You must provide your details, including your name, address, and My Number.
- Step three: Submit the form to the office after completing it. Make sure to bring your identification documents with you for verification.
- Step four: Pay the fee – A fee is associated with obtaining an income certificate. It is JPY300/piece.
- Step five: Collect your certificate
Acquiring tax certificates and residence certificates in Japan is a bureaucratic process. Still, they are essential documents for various official purposes. Following the proper steps outlined by the tax and municipal offices will ensure a smooth application process.
My Number Card at the Convenience Store
At a convenience store, you can obtain Certificates of Income Tax(Shotoku Shoumeisho) or Certificate of Residence Tax(Nouzei Shoumeisho). Japan’s My Number Card is a unique identification card that contains an individual’s taxpayer identification number, known as the “My Number.”
The cost is JPY200/piece – almost 24/7 available.
Tax Filing(Kakutei Shinkokusho)
If you do Tax Filing (Kakutei Shinkoku), you can get Tax Filing when you do it. You can’t reissue the copy, so keep it. If you get it in PDF, you can print it to show it.
Tax WIthholding slip (Gensen Choushu Hyo)
Your employer issues a tax withholding slip. You can use it to prove your income if you’re just an employee and have no other job or capital gains.
You can ask to reissue it if you lose it to your employer, though they sometimes may be irritated by the request.
Hypo Tax by yourself
Check your tax
You can image your tax amount by looking into the Certificate of Income. Obtaining a tax certificate is a relatively straightforward process that individuals themselves can do.
You may not be interested in your Certificates of Income, but take the time to look at them to understand an income tax amount.
To decrease tax
Another critical aspect of managing your taxes in Japan is finding ways to decrease your tax burden.
For individuals, standard deductions include expenses related to housing, education, medical costs, and donations. Keeping track of these expenses and having them in your tax return can lower your taxable income and decrease the tax you owe.
Businesses can also benefit from tax incentives and deductions. For example, Small business mutual aid for small and medium-sized enterprises (SMEs) can help lower their tax liabilities. Additionally, certain industries may qualify for specific tax incentives to promote economic growth and investment.
It is advisable to seek professional advice from a certified tax accountant (Zeirishi) in Japan to navigate the complexities of the Japanese tax system and maximize your tax benefits. I can help you identify applicable deductions and exemptions, ensure compliance with tax laws, and optimize your overall tax strategy.
In conclusion, obtaining a tax certificate in Japan is a crucial process that individuals and businesses need to complete for various reasons. It is an official document confirming your tax obligations and compliance with the Japanese tax system. The certificate can be helpful for multiple purposes, including loan applications, visa applications, and business transactions.
Understanding the Japanese tax system and its unique characteristics is essential to navigate the process smoothly. The system is based on self-assessment, meaning taxpayers are responsible for accurately reporting their income and calculating their tax liabilities. The tax rates in Japan vary based on income brackets and types of taxes, such as income tax, consumption tax, and Corporation Income Tax.