1. Introduction
In the age of globalization, many expatriates are working in Japanese branches or subsidiaries of foreign companies. In this News, we will mention some cases where you need to designate a tax agent when leaving Japan permanently.
2. Individual income tax payment at the time of departure
You can basically settle your individual income tax (national tax) of the year through year-end tax adjustments (Nenmatsu-chosei in Japanese) conducted by the employer before you leave Japan. However, in cases where you earn domestic source income such as real-estate income even after leaving Japan, you must file the individual income tax return by appointing a tax agent.
3. Resident tax payment obligations
You can also appoint a tax agent for the payment of your resident taxes.
In cases where you have an address or domicile in Japan as of January 1 and leave Japan permanently in the middle of the year, you are in principle responsible for paying resident taxes (local tax) to your municipality. The payment of your resident taxes differs depending on the following situations.
・You have received a resident tax bill before leaving Japan.
A lump-sum payment before your departure would be recommended.
・You have not received a resident tax bill before leaving Japan.
You should designate a tax agent to pay your resident taxes on your behalf.
In both cases, you must submit the notification of change of address to your municipality before leaving Japan.
4. Conclusion
In this News, we mentioned some cases where you need to appoint a tax agent when leaving Japan permanently.
A tax agent handles tax-related matters including tax payment on behalf of the non-resident taxpayer.
Both an individual and a legal entity can become a tax agent. A tax agent is not liable for the taxpayer’s payment duty.
You can dismiss or change your tax agent if necessary. You should take good advantage of the tax agent system, depending on your situation.
Please note that this News only introduces general outlines and does not include professional advice. So please make sure not to make any decisions without taking professional advice individually. If you have any questions, please feel free to contact us.
(References)
National Tax Agency
No.12004 Income tax information for an individual who will leave Japan
Minato-City
Payment of taxes after having left Japan
Query on the phone+81-3-6821-9455