Section 3. Taxes in Japan

3.4 Overview of withholding income tax

Japan’s tax filing system is based as a rule on self-assessed income tax payment where individuals (tax payers) calculate their annual income and tax amount, and file tax returns by themselves. In addition, a tax withholding system where companies (salary payers) collect income tax on the date of payment and pay the tax on behalf of individuals (income earners), is also introduced for specific incomes. Tax withholding at source is required when payments of certain taxable income are made, whether paid to an individual or a corporation. Income subject to the tax withholding system is determined in accordance with the type of income and the classification of the recipient of that income.

3.4.1 Withholding at source and payment procedures

Persons/companies who pay income subject to withholding at source must pay the taxation office the amount of tax withheld at source no later than the 10th day of the month following that the income was paid. However, when a payer with a domicile or business office in Japan pays income to a non-resident or a foreign corporation in another country, the withholding income tax may be paid by the last day of the month following that the income was paid. Regarding withholding tax paid on residents’ salaries, certain professional fees, a special measure is provided for small businesses with fewer than 10 persons on the payroll that allows them to pay withholding income tax in six-month installments twice a year (by July 10 and by January 20).

3.4.2 Withholding tax on residents (individuals)

Payments made in Japan of the following or other prescribed income to residents are subject to withholding at source:

  • Interest
  • Dividends
  • Salary, wages, bonuses and similar compensation
  • Retirement allowances
  • Compensation, fees, etc., to certain professionals

3.4.3 Withholding tax on domestic corporations

Payments made in Japan of the following or other prescribed income to domestic corporations are subject to withholding at source:

  • Interest
  • Dividends

3.4.4 Withholding tax on non-residents and foreign corporations

Upon the payments made in Japan of the prescribed domestic-sourced income described in 3.2.1 (4) or (5) above to a non-resident or a foreign corporation, or such payments made overseas by payers with a domicile or business office, etc. in Japan, tax should be withheld. Of these payments, payments of certain categories of income as prescribed for non-residents and for foreign corporations to a non-resident or a foreign corporation with a permanent establishment within Japan are exempt from withholding taxation, provided that a certificate from the taxation office is presented to the payer attesting that the income will be attributed to that permanent establishment and will be added to business income subject to self-assessment for tax purposes.

Section3: Table of Contents


Section3:Documents businesses are required to submit to authorities

Section3
(Section1)
Documents Where documents are listed within the URL Reference The competent authorities
relating to the document
3.3.1
(1.6)
Notification of Incorporation of a CompanyExternal site: a new window will open See National Tax Agency
Guidelines 1. Notification of corporation establishment
National Tax AgencyExternal site: a new window will open
3.3.1
(1.6)
Notification of Incorporation / Establishment of corporation
(for submission to Tokyo Metropolitan when establishing an office in Tokyo)
ReferencePDF File(364KB) Tokyo Metropolitan Government
Bureau of taxationExternal site: a new window will open
3.3.1
(1.6)
Notification of Incorporation of a Company (for submission to municipalities) ReferencePDF File(401KB) Local municipality offices
3.3.1
(1.6)
Notification of a foreign companyExternal site: a new window will open See National Tax Agency
Guidelines 2. Notification about Becoming Foreign Ordinary Corporation
National Tax AgencyExternal site: a new window will open
3.3.10(3)
(1.6)
Application for Blue Form ReturnExternal site: a new window will open National Tax Agency
Guidelines 6. Application form for Approval of Filing Blue Return
National Tax AgencyExternal site: a new window will open
3.4.2
(1.6)
Notification of Establishment / Relocation / Discontinuance of Salary Paying Office etc.External site: a new window will open See National Tax Agency
10. Notification of Establishment/
Relocation/Closure of a Salary-paying office
National Tax AgencyExternal site: a new window will open
3.3.10(1)
(1.6)
Application for Special Provision for Extension of the Due Date for Filing a Final Tax ReturnExternal site: a new window will open See National Tax Agency
5. Application for Special Provision for Extension of the Due Date for Filing a Final Return Form
National Tax AgencyExternal site: a new window will open
3.3.1(1)
(1.6)
Application for Approval Made in Relation to the Special Provision for Due Dates for Withholding Income TaxExternal site: a new window will open See National Tax Agency
11. Application for Approval Made in Relation to the Special Provision for Due Dates for Withholding Income Tax
National Tax AgencyExternal site: a new window will open
3.3.10(1)
(1.6)
Notification of a Disposition of/Application for Approval of Extension of the Due Date for Filing a Final Tax Form
(for submission to Tokyo Metropolitan)
ReferencePDF File(925KB) Tokyo Metropolitan Government
Bureau of taxationExternal site: a new window will open
3.3.10(1)
(1.6)
Notification of a Disposition of/Application for Approval of Extension of the Due Date for Filing a Final Tax Return
(for submission to municipalities)
ReferencePDF File(775KB) Local municipality offices

Materials listed as ‘Reference’ contain samples of documents regarding registration, visa, taxation, personnel and labor matters that are necessary when a foreign company establishes a corporation or other entity in Japan. These documents are not published by competent authorities and therefore are not official. For those who are going through the official procedures, please obtain the latest official documents from the competent authorities and related bodies or consult a person who specializes in advising on such information and procedures.

The information contained in this documents should be used at the reader’s independent discretion. While JETRO makes every effort to ensure the accuracy of the information it provides, no responsibility is accepted by JETRO for any loss or damage incurred as a result of actions based on the information provided in these documents or provided by the external links listed on these pages.

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