Local Income tax

Local Income tax

Prefectural Inhabitant Tax and Municipal Inhabitant Tax are generically called "Local Income Tax". In other words, the so-called "Local Income tax" is composed of these 2 kinds of taxes. They are often 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). But they all mean the same, the specific kinds of individual taxes imposed by local bodies.
The Prefectural Inhabitant Tax is paid to the prefecture in which you live, and the Municipal Inhabitant Tax is imposed by the municipality in which you live. I am afraid that some of foreigners do not know well about the administrative structure of Japan, which has 2 layers, the prefecture and the municipality. These two bodies have their respective rolls and collect taxes for their activities.
However, they look as if they are a single tax because the tax bases are common and they are collected together in a lump sum. The collection of the Local tax is conducted by the municipal office so that many people are not aware that a portion of the taxes are paid to the prefectural office.

[In Japanese]
都道府県民税と市町村民税は、まとめて住民税と呼ばれます。つまり、いわゆる”住民税”は、都道府県民税と市町村民税の2つの税目からなりたっているということです。 住民税は、地方税や市民税などと呼ばれることもあり紛らわしいですが、いずれも同じもの。つまり、地方政府が個人に賦課するある特定の税目を指しています。

とはいえ、この2つの税目を見分けることは難しいかもしれません。というのも、これらは、ほとんどの場面でひとまとめにして取り扱われているからです。 課税標準も共通のものですし、その納付も一括にまとめて行われています。住民税の徴収は市町村役場が一括して行いますので、その一部が都道府県に収められているとは気が付かないかもしれませんね。

Taxpayers of the Local income tax

The local bodies impose the local tax on residents living under their jurisdiction as of January 1st of each year. It means that you don't have to pay the Local tax to any Japanese city in case you don't have an address in Japan as of the date.

Let's think for example about the case where a foreigner moves to Japan as of January 2nd, 2022. The Local tax for 2022 shall not be imposed on him and the tax for 2023 shall be the first one imposed on him.

[In Japanese]
住民税は、区市町村役場によって合算して徴収されますが、貴方がその年の1月1日に住所を有する都道府県および市町村に納付することとされています。 言い換えれば、その年1月1日に日本国内に住所を有しない場合には、住民税を納める義務はありません。

Commonly seen Over taxation

The residents as of January 1st of the relevant year shall be the taxpayers of the Local income tax. And
Municipal office staff so often depend on the resident registry to search the taxpayers under their jurisdiction. But this method causes a serious problem because the resident registry is not necessarily arranged for tax purpose. For example, if a foreigner intends to stay in Japan for longer than 3 months, a residence card shall be issued for him/her, and he/she shall be registered on the resident registry of a Japanese city as its resident. This is true even though his/her stay in Japan is temporary in nature and he/she should be categorized into Non-Residents for tax purpose. Tax laws define "Resident" and "Non-Resident" as specified terms for taxation purpose. Notwithstanding, municipality office staff often mistakenly regard all of the registered people as the "Residents" and the taxpayers. Indeed, the staff don't hold any effective measures to distinguish the "Residents" for taxation purpose among people registered on the resident registry.
Non-Residents must be exempt from Japanese local income tax. If you face such a situation, you can reject the tax payment even when a tax notice from the municipal office is sent to you, by insisting you are not a Resident for tax purpose.

[In Japanese]
上記のように各年1月1日時点での住民が住民税の納税義務者です。市役所の職員は、管轄下の納税者を把握するために住民票を使います。 ところが、この方法によることには重要な問題点があります。というのは、住民登録の制度は必ずしも課税のために作られているわけではないからです。 例えば、外国の方が日本に3カ月以上滞在する予定である場合には、在留カードが交付されるとともに、その人はどこかの市町村に住民登録がなされます。 これは、その人の滞在が一時的な性格のものであり、税務上「非居住者」に該当する場合であっても同様です。税法は、「居住者」「非居住者」を、税法分野の専門用語として定義をしており、非居住者については日本の住民税は免除されます。それにもかかわらず、市役所は住民票に搭載されている人すべてが住民税の納税義務者であると思い込み、住民税の課税手続きを進めてしまうのです。というのが、市役所職員には、住民票搭載者のうち、税法上の非居住者として分類される人を見分ける手立てをもっていないからです。
非居住者は住民税を納付する義務はありません。 もし、貴方がこのような事態に遭遇した場合には、貴方が税法上の非居住者である旨を主張して、住民税の納付を拒絶することが可能です。

Tax amount of the Local tax

Local income tax has 2 kinds of tax bases, a per-capita basis and a per-income basis, and the total sum of the amount respectively figured out based on the 2 bases shall be the tax amount to be paid.

The amount of the local taxes levied on the per-capita basis is only 5 thousand yen per year, and it is not so important. The amount of the local tax levied on the per-income basis is calculated by multiplying 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.

The local Income tax amount is larger than the National Income tax amount for many people, because the National Income tax rate for them, which is progressive along with their taxable income amount, are lower than 10%.

[In Japanese]
住民税は均等割と所得割とからなりますが、均等割は年5千円に過ぎず、少額です。所得割は、その年の前年分の課税所得に10%(都道府県民税として4%、市町村民税として6%)を乗じて算出します。 課税所得の計算は、所得税の計算とほぼ同様です。

多くの人にとって、住民税は所得税より多額になります。 というのも、所得税は所得が増えるに従って税率が高くなる超過累進税率によって計算されており、多くの人にとって、適用される所得税率は10%より低くなっているからです。

Taxation Procedures

The Local Tax act requires the residents to submit local tax returns for the relevant year, to the relevant municipal offices during the period from February 16th through March 15th of the following year.

You have to be careful not to omit the local tax filing even when you gain no income during the relevant year. In such a case, you do not have to file the national income tax returns. But in contrast, the local tax returns are still necessary to be submitted. It is because the data provided by the local tax return shall be used not only to calculate local income tax amount, but also to define residents eligible for different welfare policies by the local bodies. Therefore, if you omit it, it raises concerns that you lose preferential treatments, which is potentially applicable to you.

Meanwhile, there are 3 exceptions to this principle. You do not have to submit the local tax return in the following 3 cases. The 2nd case and the 3rd case apply to many people and maybe those who file the Local tax returns account for a relatively small portion of us. You can voluntarily file your local tax return if there are any deduction/exemption items which are not taken into consideration in the preceding procedures.

[In Japanese]

なお、前年中に全く所得がなかった場合にも、住民税申告を忘れないようにしてください。所得税(国税)については、そのような場合には申告義務がありませんが、住民税の場合にはそうではありません。 住民税申告の内容は、単に住民税額を計算するためだけではなく、各種の福祉制度の対象者を把握するためにも活用されていますので、その提出を忘れた場合には、適用を受けられるはずの優遇措置を失うことになりかねません。


Payment procedures

The prefectural tax and the municipality tax are collected together in a lump sum by the municipality bureau. The relevant bureau shall notify you when and how much you pay, every April or May.
You can see the notification form and its English translation from the banner below. The payment method is not absolutely uniformed by the municipalities. For example, Gotsu city in Shimane prefecture expects her residents to pay the taxes in 4 installments, at the end of June, August, October and the next January.

sample of the Notification of Local taxes

Special Collection system

However, If you are a regular employee at a company, the local taxes may be withheld from your monthly salaries, and paid to the local government by your employer, 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 divided in 12 installments, and each one shall be deducted from your monthly salaries from June through the next May.

[In Japanese]


もし、貴方が正社員としてお勤めの場合には、住民税は月々の給与から天引きされ、勤め先から市役所に直接納付されている場合があります。これを「特別徴収」といいます。 この場合には、住民税額は、各年5月に、勤め先を経由して貴方に通知されます。住民税額は12分割され、6月から翌年5月までの各月の給与から天引きされるのです。