Japanese Business Glossary

源泉徴収票 (gensen choshūhyo), withholding tax certificate, is issued by employers in Japan, detailing the amount of income earned and the taxes withheld from an employee's salary over a fiscal year. This document is crucial for both employees and tax authorities, as it serves multiple purposes including income verification and tax filings.

The withholding tax certificate contains several key pieces of information: the total amount of salary paid, the amount of income tax withheld, social insurance premiums deducted, and any applicable deductions such as for dependents or insurance premiums. This information helps employees verify their annual earnings and tax payments, ensuring that the correct amount of tax has been withheld and paid to the authorities.

Employees typically receive their gensen choshūhyo, withholding tax certificate, after the completion of year-end tax adjustments (年末調整 = nenmatsu chousei), which employers conduct to reconcile any discrepancies between the estimated tax withheld and the actual tax owed for the year. The document must be issued by January 31 of the following year. In cases where an employee changes jobs, they should receive a withholding tax certificate from each employer for the period they were employed during that year.

This certificate is also used when filing a final tax return (確定申告 = kakutei shinkoku), especially if additional deductions such as medical expenses or mortgage interest are to be claimed.

所得税 減税 (shotokuzei genzei) refers to income tax reduction in Japan. It involves lowering the amount of income tax that individuals or businesses are required to pay to the government.

The purpose of an income tax reduction is to provide financial relief, stimulate economic activity, and encourage spending and investment. Various policies and measures can be implemented to achieve this, such as increasing tax deductions, introducing tax credits, or reducing tax rates.

Income tax reductions can benefit both individuals and businesses by increasing disposable income and reducing the financial burden, ultimately contributing to overall economic growth and stability.

雑所得 (zatsu shotoku) refers to miscellaneous income in Japan. It encompasses various types of income that do not fall under other specific categories like employment, business, or investment income. Examples of miscellaneous income include earnings from freelance work, royalties, occasional side jobs, and certain types of rental income.

This type of income is subject to taxation and must be reported when filing annual tax returns. Properly accounting for miscellaneous income is essential for compliance with Japanese tax laws, ensuring that individuals accurately report all sources of income and pay the appropriate taxes. Failing to declare miscellaneous income can result in penalties and legal issues.

税務署 (zeimusho) is the tax office in Japan. It is a local government agency responsible for administering tax laws and regulations, collecting taxes, and providing tax-related services and information to the public.

Each region in Japan has its own tax office, which handles tax matters for individuals and businesses within its jurisdiction. The duties of a tax office include processing tax returns, conducting audits, and enforcing tax compliance. They also offer guidance and support to taxpayers, helping them understand their tax obligations and assisting with any issues that may arise.

Visiting or contacting the tax office is often necessary for tasks such as filing tax returns, obtaining tax certificates, and addressing specific tax-related inquiries. The tax office plays a crucial role in ensuring the proper functioning of Japan's tax system, contributing to the overall financial stability of the country.

配偶者控除 (haigūsha kojo) is the spousal tax deduction in Japan. This tax benefit allows a taxpayer to reduce their taxable income if they have a spouse who earns below a certain income threshold.

The purpose of the spousal tax deduction is to provide financial relief to households where one spouse is the primary earner and the other has little or no income. To qualify for this deduction, the spouse's annual income must be below a specified amount, which is subject to change by tax regulations. The primary earner can then apply this deduction when filing their annual tax return, effectively lowering their overall tax liability.

The spousal tax deduction helps support families by reducing the tax burden on single-income households, making it easier for them to manage their finances. This deduction is a significant aspect of Japan's tax system, aiming to recognize and support the economic contribution of non-working or low-earning spouses.

源泉所得税 (gensen shotokuzei) is withholding income tax in Japan. This tax is deducted at the source of income, meaning it is withheld by the payer and submitted directly to the tax authorities on behalf of the recipient.

Commonly applied to salaries, wages, bonuses, and other types of compensation, the practice of withholding income tax ensures that taxes are collected promptly and efficiently. Employers are responsible for calculating and withholding the appropriate amount of tax from their employees' earnings before paying them. This system not only streamlines tax collection but also simplifies the tax process for employees, as the tax is automatically taken out of their income.

At the end of the year, individuals may need to file a tax return to reconcile their total tax liability with the amount of tax that has been withheld. This may result in a refund if too much tax was withheld or an additional payment if too little was deducted. The system of withholding income tax is a key component of Japan's tax administration, promoting compliance and easing the burden of tax payments for both taxpayers and the government.