Local Income tax

The Prefectural inhabitant tax and Municipal inhabitant tax are collectively called "Local Income tax". In other words, the so-called " Local Income tax" is composed of these 2 kinds of taxes. As you would guess, the Prefectural Inhabitant tax is paid to the prefecture in which you live. The Municipal Inhabitant tax is imposed by the Municipality in which you live. They are 2 different taxes. But indeed, it may be difficult for you to discriminate these 2 taxes, because they are almost always handled together. The tax bases are common and besides they are collected togeher in a lump sum.

It may be confusing that sometimes it is called differently, such as CHIHOU ZEI(地方税 literally translated as "Local tax"), JUMIN ZEI(住民税 " Inhabitant tax)or SHIMIN ZEI(市民税 " Citizens tax). However, they all mean specific kinds of individuals taxes, imposed on almost the same tax bases to National Income tax by the Local government.

They are collected by the Municipal office together in a lump sum. It is paid to the Local bodies where you have your address(domicile) or the main residence as of January 1st of the relevant year. You don't have to pay the Local income tax to any Japanese city if you don't have an address nor a residence in Japan as of the date.

〔In Japanese〕





Local income tax consists of the amount levied on a per-capita basis and that levied on per-income basis.
The amount of the former is no more than several thousands yen. So, that is not so important.
The latter is calculated by multipling 10% ( 4% as prefectural tax and 6% as municipal tax) to your income of the previous year. The taxable income is calculated similarly to the National Income tax.
For many people, the amount of the local Income tax is larger than the National Income tax. It is because the National Income tax rate (which is progressive along with their income amount) applied to many people is lower than 10%. Regarding the National Income tax rate, please refer to the relevant page of this site.

〔In Japanese〕


Procedures for taxation and payment

The Local Tax Act tells that the Local Income Tax is not based on the "Self assessment system", as the National Income Tax is. Instead, the Local Income Tax amount is supposed to be calculated by the local government. However, it must be misleading. How do the municipal office staff get information to tell the accurate tax amount on each resident? After all, we have to provide it in some way.

Regarding it, those who submit the Income tax return to the national tax office does not have to do anything for the Local taxation. It is because the national tax office staff shall provide the necessary information to the relevant municipal office. Regular workers who earn only Employment income from only 1 resource also do not have to do anything. In this case, the employers are supposed to report the necessary information with the form of "Payment report of Salaries and wages" to the municipal office. As to this form, you can get detail information at the "tax document" page in this site.

Besides these exceptions, you have to provide the information to the municipal office by yourself. It means you are supposed to submit a prescribed form similar to the National tax return form during the period from February 16th through March 15th of the following year.

It is important for you not to omit this report even when you gain no incomes during the previous year. As for the National Income tax, you do not have to file the tax return. In contrast, you are supposed to submit the report for the Local Income tax under such a situation. The contents you report with it shall be used to define residents eligible for some welfare policies. So, if you omit it, it raises concerns that you lose preferential treatments, which is potentially applicable to you.

You shall pay the tax( both the prefecutural tax and the municipality tax together) in a lump sum to the municipality bureau. It shall notify you when and how much you pay, every April or May.
For example, Gotsu city expects her residents to pay the tax in 4 installments, at the end of June, August,October and the next January.
However, If you are a regular employee at a company, that may be withheld from your monthly salaries and paid by your employer to the local government, under so-called " Special collection system". In this case, the tax amount is notified to you via your employer every May. The tax amount shall be devided in 12 installments. Each installment shall be deducted from your monthly salaries from June through the next May. The employers shall pay them by 10th of the following month, on behalf of you.

〔In Japanese〕

住民税法では、住民税は、国税である所得税とは異なり、申告納税制度を採用していないということになっています。その代わりに、住民税額は地方公共団体によって算出されるということです。しかし、この説明は誤解を招くものといえそうです。区市町村役場の職員は、どうやって正しい税額算定のために必要な情報を知ることができるのでしょう? 結局のところ、必要な情報は何らかの方法で提供されなければならないのです。