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Tax Reduction 2024 in Japan

Want to know more about the tax reduction 2024 in Japan? Check out our video and get in touch with us at Seventh Sense Group!

The Japanese government will introduce the Flat-rate Tax Reduction in June 2024. This tax cut is designed to reduce the tax burden on employees due to rising prices. The applicable taxes include income tax and inhabitant tax, and the amount is 40,000 yen per person. This is a combination of 30,000 yen for income tax and 10,000 yen for inhabitant tax. If the taxpayer has a spouse and dependents (see the reminder), the tax reduction is multiplied by the total number of people in the household.

For example, if the taxpayer has a spouse within the same household and 2 children who are dependents, the tax reduction amount is:

40,000 yen (taxpayer) + 40,000 yen (spouse) + 40,000 yen x 2 (dependents) = 160,000 yen

Procedures of the tax reduction

The way in which the reduction is applied to income tax and resident tax is different.

Income tax

The income tax reduction is deducted from the withholding tax, and if the reduction couldn’t be applied in full, the remaining will be deducted from the next withholding tax until it is deducted in full. If there is a residual, it will be deducted at the time of the year-end adjustment. And if the reduction still hasn’t been made in full, a benefit measure will be provided.

Inhabitant tax

For June, there is no inhabitant tax and the reduced tax will be spread over 11 months and will be deducted from the salary from this July to next May. In the event that the tax reduction hasn’t been made in full, a benefit measure will be provided.

Eligibility

The tax reductions are only available to people who meet all of the following requirements:

  • People who are employed as of June 1 2024 (and who have applied for the Dependent Exemption 2024)
  • People who have lived in Japan for at least 1 year (residents)
  • People who have an annual income of less than 18.05 million yen (if salary only, less than 20 million yen in a year)

Reminder

Spouses in the same household and dependents described here are different from those described at the time of the end-of-year adjustment, and dependents include dependents under the age of 16.

Contact us!

This information is for general informational purposes only and should not be considered as professional advice. Please consult wth a qualified professional for any specific questions you may have.

If you would like to know more about the tax reduction in Japan, please do not hesitate to contact us at Seventh Sense Group!

This information is for general informational purposes only and should not be considered as professional advice. Please consult with a qualified professional for any specific questions you may have.

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