Step-by-step guide to claiming your tax refund in Japan
Have you lived and worked in Japan?
Did you know that you could be entitled to a tax refund?
At Taxback, our average Japanese tax refund amount is ¥111,000!
That is a substantial amount of money that many people leave behind with the tax authorities as they aren’t sure how to claim their tax refund or what their tax entitlements are.
In this article, we will provide a step-by-step guide to claiming your tax refund in Japan.
Who qualifies for a tax refund in Japan?
The Japanese tax year runs from 1 January to 31 December.
If you have worked in Japan, you could be due tax back. In order to claim your tax refund, you must file a tax return.
If you paid pension contributions and have permanently left Japan in the last two years you may be entitled to claim tax back on these payments.
Below are just some of the reasons why you could be due a tax refund:
- You have overpaid income tax throughout the tax year
- Your employer withheld excess tax from your salary
- If you had eligible expenses such as medical expenses
- You didn’t claim your tax reliefs and credits that you are entitled to
Determining your tax residency status
Firstly, you need to determine your residency status for tax purposes in Japan.
You will be considered a non-permanent resident if you have lived in Japan for less than five years but more than one year over the previous ten years.
As a non-permanent resident you will pay taxes on all income, excluding income that is earned abroad and does not get sent to Japan.
A permanent resident is a person who has spent five years or more living in Japan in the previous ten years. As a permanent resident of Japan, you will pay taxes on your worldwide income in Japan.
A non-resident of Japan is someone who has lived there for one year or less. As a non-resident in Japan, you will only pay taxes on Japan sourced income and not on income from abroad.
Income tax rates in Japan for 2024
| Income | Tax Rate |
|---|---|
| ¥0 - ¥1,950,000 | 5% |
| ¥1,950,001 - ¥3,300,000 | 10% |
| ¥3,300,001 - ¥6,950,000 | 20% |
| ¥6,950,001 - ¥9,000,000 | 23% |
| ¥9,000,001 - ¥18,000,000 | 33% |
| ¥18,000,001 - ¥40,000,000 | 40% |
| Over ¥40,000,000 | 45% |
Understanding Consumption Tax in Japan
Consumption tax is applied to physical goods and services in Japan. It is similar to Value Added Tax (VAT) as it is a levy applied to domestic sales of goods and services imported into Japan.
The general rate of Japanese consumption tax is 10%. However, a reduced rate of 8% applies to food, beverages and eligible newspaper subscriptions which meet criteria.
As a consumer, when you purchase products in Japan the consumption tax is included in the display price.
The good news is, if you are visiting the country for less than six months, you don’t work there, and you are a non-resident in Japan, you can avail of consumption tax exemption. Essentially, you can enjoy tax-free shopping!
However not everywhere offers tax-free shopping so it’s important to look out for the ‘tax-free shopping’ notice.
How do I claim my Japanese tax refund?
To begin the Japan tax refund process, simply complete the short application form here.
Once you have sent us any requested information and documentation, our team will take it from there.
We’ll ensure you claim everything you’re entitled to and that you remain compliant with the Japanese tax authorities.
Claiming my pension refund from Japan
Employees in Japan are required to pay a pension contribution from their wages. This is typically 11% of your salary.
The good news is, you may be entitled to claim a tax refund on your pension contributions.
You can claim a Japanese pension refund if:
- You’re not a citizen of Japan
- You paid national pension insurance for six months or more
- You permanently left Japan less than two years ago
The average Japanese pension refund is a substantial ¥600,000 so it’s well worth checking what you could be owed.
Apply for your pension refund today!
What documents do I need to file a tax return?
In order to claim tax back in Japan you will need the following:
- Gensen-Choshy-Hyo – This is a statement of your income and the amount of tax paid which you will get from your employer at the end of the tax year.
- ID – For example your passport
- To apply for your pension refund from Japan you will need to provide a copy of your pension number or pension book
Need help filing your tax return? Taxback makes claiming tax back in Japan easy!
How long does it take to receive a tax refund?
It can take approximately two to four months for your Japanese tax refund application to be processed once your application is sent to the tax office.
During this time, you can track the progress of your application by logging into your Tax Tracker account.
Alternatively you can reach out to our Live Chat team anytime, or contact your Account Manager directly.
Common tax mistakes and how to avoid them
Lots of taxpayers make mistakes when filing their Japanese taxes, so the most important thing to do if you made a mistake is not worry!
A common mistake that people make when filing a tax return in Japan, is that they aren’t aware of their tax residency status.
As previously mentioned, it is important to know your residency status in Japan for tax purposes as it will determine the tax rules that apply to you.
For instance, a non-permanent resident and a permanent resident of Japan will be subject to different taxes on income earned from outside of Japan.
You should also keep note of the key tax dates throughout the tax year to avoid missing the tax deadline.
How can Taxback help?
Filing tax refund forms in Japan can be a complicated process to undertake when you are not familiar with the Japanese tax system.
At Taxback, our team of tax experts can handle the tax refund process for you. This way, you can avoid the tax paperwork and instead let our team claim your maximum tax refund for you. After all, our average customer receives a tax refund of ¥111,000!
When you apply with us, we will ensure you claim everything you’re entitled to for the previous five tax years.
Why choose Taxback?
- Maximum legal tax refund guaranteed
- Remain compliant with the tax authorities
- We offer a multilingual service
- 24/7 Live Chat support
Don't miss out on your entitled tax refund in Japan; let Taxback guide you through the process hassle-free, ensuring you receive your maximum legal refund and remain compliant with tax authorities.
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