Residency status and Income Tax categories in Japan
Case 2
I under stood my tax status of the moment. Could you tell me more about the resident status other than “non- permanent resident” and ten categories of the Income Tax?
1. Tax payer classification
(1) Residents
Any individual who has a domicile or owns a residence continuously for one year or more is classified as a resident. Residents, except for those classified as “non-permanent residents” have an obligation to pay the income tax for whole income prescribed by the Income Tax Law.
Among residents, any individual of non Japanese nationality having a domicile or residence in Japan for an aggregate period of five years or less within the last ten years is classified as a non-permanent resident. Non-permanent residents are obliged to pay income tax with respect to any income which has its sources in Japan, any income which has its sources abroad and is paid in this country and remitted from abroad.
(2) Non-residents
Any individual other than the residents mentioned in “ (1) Residents” above is classified as a non-resident. Non-residents are obligated to pay the income tax for any income from domestic sources.
2. Income Tax classification
The Income Tax is categorized as follows;
Source : 2011 INCOME TAX GUIDE by National Tax Agency
|
T y p e |
O v e r v i e w |
|
| 1. Business income Taxation
(Sales, etc. , Agriculture) |
Income derived from independent enterprises of commerce, industry, fisheries, agriculture, independent personal services, etc. |
|
|
Income derived from the sale of stocks and shares, etc. and certain income derived from futurestrading conducted on a business scale |
||
| 2. Income from real estate |
Income derived from the leasing of land, buildings, sailing vessels, aircraft, etc. Aggregate |
|
| 3. Income from interest | Income derived from interests on bonds and debentures, and savings, etc | |
| Income derived overseas from interest and other earnings paid on savings, etc | ||
| 4. Income from dividends |
Income derived from dividends from surplus of corporations, or from distribution of profit, etc |
|
|
Income such as proceeds from securities investment trusts sold by public offering(income from listed stocks and), for which you choose to use separate taxation |
||
|
Income derived from divisions of earnings etc, from corporate bond-like privilege of special purpose trust |
||
| 5. Employment income | Income derived from salaries, wages, bonuses, allowances, etc | |
| 6. Miscellaneous income |
Pensions |
Income derived from National Pension, Employee Pension, mutual aid pensions for publicservants, and other public pensions etc |
| Others |
Other income including fees for manuscripts, lectures, annuities from life insurance policies, etc.which do not fall into other types of income |
|
|
Certain income derived from the sale of stocks and shares, etc, and certain income derived from futures trading conducted as income activities (excluding those conducted on a business scale) |
||
| Income derived from profits obtained on redemptions of certain discount bonds, etc | ||
| 7. Capital gains | Income derived from sales of golf club memberships, gold bullion, machinery, etc | |
|
Income derived from the sale of land, buildings, land-leasing rights, stocks and shares, etc. *In the case of the sale of stocks and shares, etc, income as business income or miscellaneous income is excluded |
||
| 8. Occasional income |
Income derived from lump-sum payments from life insurance policies, prize money, lotterywinnings, etc |
|
|
Income derived from certain lump-sum payments from endowment life insurance policies or lump-sum payments from casualty insurance policies where the term of insurance or mutual relief is 5 years or less |
||
| 9. Income from forestry | Income derived from the sale of harvested forestry resources (timber), etc | |
| 10. Retirement income
By Certified Public Accountant (CAP) & Tax Accountant, Koji Takahashi |
Income derived from retirement income, lump-sum pensions, one-time payments of aged pensions, etc. as defined by the Defined Benefits Corporate Pension Law and theDefined-Contribution Pension Law |
|
