平成29年度版東京23区の住民税 2017Inhabitant Tax of The 23 Special Cities in Tokyo 2017年度版东京23区的住民税 2017년도판도쿄 23구의 주민세

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1 2017 Inhabitant Tax of The 23 Special Cities in Tokyo

2 The 23 Special Cities in Tokyo Ku means Tokubetsu-ku (A Special City; one of the self governing bodies) The administrative area of Metropolitan Tokyo includes 23 special cities, or ku. Like city, town, and village municipalities, these special cities have an elected mayor and assemblies comprising elected members. As basic local governments that are closest to their residents, these special cities undertake work that is closely connected to the daily lives of residents. The content of the work is very similar to that of cities, or shi. However, since the districts of jurisdiction of the special cities exist in a large metroporitan area, unlike cities, various special measures relating to administrative and fiscal affairs are established in consideration of the unity and consistency of administration. For this reason, the 23 special cities are defined under law as special local self-governing bodies. The 23 special cities all have distinctive characteristics. For example, there are special cities with a concentration of central government offices, special cities with cosmopolitan entertainment districts, special cities with historic and traditional attractions, and special cities with verdant residential areas. While cooperating and coordinating with one another, these special cities, which occupy the heart of Metropolitan Tokyo, implement their own original measures taking account of local characteristics and promote city building so that residents can lead pleasant and comfortable lives. A Tokubetsu-ku (special city) is a special system of a self governing body and this system has been used in the district of Tokyo metropolis only. This system is completely different from the Gyousei-ku (administrative district or ward) of the cities of Yokohama, Kawasaki, etc. In Tokyo, ku means a special city ( Tokubetsu-ku ) only.

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4 Contents 1 Tax and Civil Life 2 Inhabitant Tax 1 Special City Inhabitant Tax and Metropolitan Inhabitant Tax 2 Individuals and Corporations 3 Individual Inhabitant Tax 4 Per Capita Rate and Income Rate 5 Per Interest Rate 6 Per Dividend Rate 7 Per Capital Gains Derived from the Transfer of Stocks etc. Rate 3 Outlines of Individual Inhabitant Tax 1 Who should pay inhabitant tax? 2 Persons Exempt from The Individual Inhabitant Tax 3 Computation Method of Taxes 4 Brief Computation of Income 5 Deduction from Income 6 Tax Rate of The Per Income Rate (Table) 7 Deduction from Tax (Tax Credits) 8 Filing A Return for Individual Inhabitant Tax 9 How to pay inhabitant tax (About the payment of inhabitant tax) 10 Special Treatment of Taxation on Retirement Income 4 International Tax Treaties List of City Offices

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6 Tax and Civil Life We realize that our daily lives are closely connected with various public enterprises practiced by the country, the metropolis and special cities ( Tokubetsu-ku ). These public enterprises are expensive, and all of us share the cost by means of tax payment. In a manner of speaking, taxes can be said be membership fees, and our society and communities cannot go on without them. As tax payment is our duty, we should have full knowledge about taxes, while taking part in activities to build a better community.

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8 Taxes of the special cities ( 23-ku s) Tax Local Tax National Tax Special City Tax 1 Metropolitan Tax imposed by a special city imposed by the metropolis imposed by the country 1 Special City Tax Is not a special city tax but the tax of the special city (In Japanese, it is called Tokubetsu-ku-zei ). A special city imposes the tax depending on the taxpayer s domicile and other conditions. Administrative Agencies in Charge of Taxes Special City Tax (Tokubetsu-ku-zei) Tax affairs section of each special city Metropolitan Tax (To-zei) Metropolitan Taxation Offices (There is a metropolitan taxation office in each of the special cities ( 23-ku ) area of its own.) In addition, there are Automobile Taxation Offices, Metropolitan Tax General Administrative Centers, etc. National Tax (Koku-zei) National tax offices (There are 40 offices in the district of special cities [ 23-ku ].)

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10 Inhabitant Tax Special City Inhabitant Tax and Metropolitan Inhabitant Tax The Inhabitant Tax is a local tax with a kind of local community dues characteristic, spreading the cost of administrative services broadly among residents. In the 23 special cities of central Tokyo, the Inhabitant Tax consists of the Special City Inhabitant Tax, a municipal tax, and the Metropolitan Inhabitant Tax, a metropolitan tax.

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12 Individuals and Corporations In imposing the inhabitant tax, the definition of an inhabitant (or resident ) covers not only an individual but also a corporation. Therefore, the inhabitant tax can also be classified into individual inhabitant tax and corporate inhabitant tax. As for corporate inhabitant tax, special city tax is collected by the metropolis, included in the metropolitan inhabitant tax. Local Tax Special City Tax Metropolitan Tax Individual Inhabitant Tax of the Special City Light Vehicle Tax 1 Special City Tobacco Tax 2 Mineral Product Tax 3 Bathing Tax 4 Individual Inhabitant Tax of the Metropolis Corporate Metropolitan Tax Special City Inhabitant Tax Metropolitan Inhabitant Tax Othere (Fixed Assets Tax, Enterprise Tax, Automobiles Tax, and others) Individual Inhabitant Tax Corporate Inhabitant Tax 1 Light Vehicle Tax Imposed on owners of motor cycles and light cars as of April 1st. 2 Special City Tobacco Tax Imposed on consumers of tobacco. The tax is included in labelled prices. 3 Mineral Product Tax Imposed on mine operators. 4 Bathing Tax Imposed on customers who bathe in a mineral spa.

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14 Individual Inhabitant Tax The taxation system of this kind is classified into 5 kinds: per capita rate, per income rate, per interest rate, per dividend rate and per capital gains derived from the transfer of stocks etc. rate, though the last three are applied to Metropolitan Inhabitant Tax only. Individual Inhabitant Tax Individual Inhabitant Tax of The Special City Individual Inhabitant Tax of The Metropolis Per Capita Rate Per Income Rate Per Capita Rate Per Income Rate Per Interest Rate Per Dividend Rate Per Capital Gains Derived from the Transfer of Stocks etc. Rate Per Capita RateImposed regardless of the sum of a taxpayer s income. And the rate is a fixed amount Per Income RateImposed in proportion to a taxpayer s income of the previous calendar year Per Interest RateImposed in proportion to the sum of interest on deposits, savings, and some investments, etc. Per Dividend RateImposed in proportion to the sum of specific income from dividend Per Capital Gains Derived from the Transfer of Stocks etc. Rate Imposed in proportion to the sum of specific income from capital gains derived from transfer of stocks etc.

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16 Per Capita Rate and Income Rate Regarding the per capita and income rates, both the special city inhabitant tax and metropolitan inhabitant tax are calculated for the same taxpayer based on the same standard amount of his/her annual income. As a result, the city levies not only the special city inhabitant tax but also the metropolitan inhabitant tax on each resident taxpayer and then notifies him/her of the sum of both taxes in the form of a single inhabitant tax, which the taxpayer must pay to the city office. Individual Inhabitant Tax Levied and Collected by the City Per capita rate of special city inhabitant tax Income rate of special city inhabitant tax Per capita rate of metropolitan inhabitant tax Income rate of metropolitan inhabitant tax Upon collecting the four amounts above, the city office later pays an amount equivalent to the sum of rates and to the Tokyo Metropolis. Per Interest Rate The taxation of the interest rate is applied to interest on bank deposits and other savings and deposits in any financial institution, separated from other income. And the interest rate is a five percent of the interest receipts. To be concrete, when a financial institution in Tokyo pays a depositor his interest, it deducts the tax from the interest and pays the tax to the metropolis, under the name of metropolitan inhabitant tax of Tokyo. If the financial institution is in another prefecture, the tax is, of course, paid to the prefecture as prefectural tax. Information As for income from interest, a national income tax plus special income tax for reconstruction of % is also levied in the same way. Accordingly, the sum of the metropolitan inhabitant tax (5%) and the national tax plus special income tax for reconstruction becomes %. However, uniformly separate taxation for interest is not imposed on physically handicapped persons, when the sum of principal does not reach the fixed standard.

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18 Per Dividend Rate The taxation of the dividend rate of 5% is applied to a fixed amount of dividend income received from a listed stocks etc. The payment of tax is done by the payer of dividends who will act as a special withholding agent of inhabitant tax with obligation (or special withholding obligator ). To be concrete, when a special withholding agent pays a recipient his dividend, it deducts the tax from the dividend and pays the tax to the prefecture where the taxpayer resides as prefectural inhabitant tax. Since the tax from dividend income is withheld under special collection, then no declaration is necessary. However, in the case of declaration of the said income, then deduction for dividends as well as deduction for the amount of dividend rate will be applicable. However, if a person opts for separate taxation, the dividend deduction is not applicable. Information As for the fixed amount of dividend income received from listed stocks, a national income tax plus special income tax for reconstruction of % is also withheld at source in the same way. Accordingly, the sum of the metropolitan inhabitant tax and the national tax plus special income tax for reconstruction becomes %. Per Capital Gains Derived from the Transfer of Stocks etc. Rate The taxation of 5% is applied to the amount of capital gains derived from the transfer or sales of listed stocks etc. that are held in a special account for withholding tax at source. The payment of tax is done by the payer of the value amount of stocks sold or transferred who will act as a special withholding agent. To be concrete, when a special withholding agent pays a recipient his value of stocks sold or transferred, it deducts the tax from the amount and pays the tax no later than January 10th of the following year to the prefecture where the taxpayer resides as prefectural inhabitant tax. Since the tax from capital gains derived from transfer or sales of stocks etc. is withheld under special collection, then no declaration is necessary. However, in the case of declaration of the said income, then deduction for the amount of capital gains derived from transfer or sales of stocks etc. rate will be applicable. Information As for the fixed amount of capital gains held in special account for withholding tax source, a national income tax plus special income tax for reconstruction of % is also withheld at source in the same way. Accordingly, the sum of the metropolitan inhabitant tax and the national tax plus special income tax for reconstruction becomes %.

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20 Outlines of Individual Inhabitant Tax Who should pay inhabitant tax? The following people are obliged to pay the inhabitant tax (regardless of nationality): Taxpayer An individual who domiciles in a Special City. An individual who has his/her own office, work place and/or home and lot in a Special City is deemed to a taxpayer (including properties lent from others but excluding properties lent for others), though he/she does not domiciles there. Taxation Per Capita Rate and Per Income Rate Per Capita Rate Whether an individual has his/her domicile (or owns an office, etc.) in the Special City of Tokyo or not is judged according to the situation as of January 1st in the year of taxation. Domicile of Departed Persons The domicile of a person who has departed from Japan is determined circumstantially. In the case where a person happens to be out of Japan as of January 1, if it is judged from duration, purpose, address during stay overseas, etc. that the departure is no more than a simple trip, that person s domicile prior to departure will be treated as the current domicile.

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22 Persons Exempt from The Individual Inhabitant Tax Conditions of taxation and exemption from each rate Individuals who meet the following conditions are exempt from per capita rate and per income rate of the individual inhabitant tax. (These states are decided according to conditions as of January 1st of the taxable year) Non taxable person (Exempt from per capita rate and per income rate) Taxable person of both rates (No exempt from inhabitant tax) Taxable person of per capita rate only (Exempt from per income rate) Those who are on welfare by the Livelihood Protection Law Disabled persons, minors (those who are under 20 years old.), or widows (widowers) whose total income of the pervious calendar year was 1,250,000 or less ( 2,043,999., if their receipts were only employment income which is salary, wage and other. See page 25 Brief computation of income) Those whose total income in the previous calendar year did not exceed the amount computed as follows 350,000 (a spouse and number of dependents + 1) + 210,000 (If they have no spouse and no dependents, the 210,000 yen should not be added.) Those whose gross income of the previous calendar year exceeded the amount computed as follows. 350,000 (a spouse and number of dependents + 1) + 320,000 (If they have no spouse and no dependents, the 320,000 yen should not be added.) Those whose total income of the previous calendar year exceeded case of and whose gross income of the previous calendar year did not exceed case of Total incomethe total amount of various types of income before deducting the losses carried over Spouses and DependentsSpouses and dependent family members who are eligible for deductions. A spouse who is eligible for deduction is the wife or husband of a taxpayer who is living in the same household as the taxpayer and had a total income in the previous year not exceeding 380,000, excluding family business employees. A dependent who is eligible for deduction is a family member other than the spouse who is living in the same household as the taxpayer and had a total income in the previous year not exceeding 380,000, excluding family business employees Gross incomegross income is determined by deducting Losses Carried Over and Net Loss Carry-Over from Total amount of various types of income. If you have no deduction, your gross income is the same as your total income

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24 Computation Method of Taxes Per capita ratefrom FY 2014 to FY 2023 the per capita rate will be as follows: Per capita rate of Special City Individual Inhabitant Tax 3,500 Per capita rate of Metropolitan Individual Inhabitant Tax 1,500 Per income rate The Taxable Amount Per Income Rate of Income Tax Rate Amount of Tax Credit The Taxable Amount of Income Gross Income of The pervious Calendar Year Amount of Deduction from Income Aggregate taxation and separate taxation Income can be classified as employment income, business income and property. In computing per income rate, the tax is based on the aggregate of each kind of income in the previous calendar year. Aggregate Taxation As for other kinds of income such as retirement income, capital gains on the sale of land, buildings, the tax is separately calculated without being aggregated with other income. Separate Taxation

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27 The income is divided for purposes of calculation. Each type of income is calculated by deducting the necessary deductible expenses from annual total receipts from January to December in a specific year, according to the category of income. Individual inhabitant tax of a year is imposed on income of the previous calendar year, and accordingly the calculation of tax as of the year of Heisei 29 (2017) is based on the income of the year of Heisei 28 (2016). Income earned during the preceding year. In the case of a person who entered Japan in the preceding year. The amount of income which was earned from sources in Japan before entry and all income earned after entry into Japan. In the case of those who resided in Japan during the preceding year. All income Type of Income and Method of Calculating Income Category of income Method of calculating income Employment income Salaries, wages, allowances, bonuses, etc. duction for Specific Expenses) (Total Receipts) minus (The employment income deduction) or (De- Retirement income Retirement allowance, lump sum {(Total Receipts) minus (Deduction for Retirement income)} 2 pension, etc. For details, see page 44. Business Income Income derived from enterprises. (Total receipts) minus (Necessary deductible expenses) Income from Real Rent from immovables (houses, (Total receipts) minus (Necessary deductible expenses) Property (Immovables) land, etc.) Income received from the sale of (Total receipts) minus (The acquisition cost) minus (installation expenses, Capital Gains improvement expenses and expenses incurred in connection assets such as the sale of land, buildings, rights therein and stocks with the sale of assets) minus (Special deduction) Dividend Income Interest Income Forestry Income Occasional Income Miscellaneous Income Brief Computation of Income Income derived from dividends and distributions from surplus pertaining to an investment in capital Interest on public and company bonds and on deposits, and dividend of public and company bond investment trust Income derived from the sale of trees, woods and timbers. Prizes of a quiz, and similar income Others (Government pensions, publication royalties and compensation for manuscripts, etc.) The following item should be deducted from the total receipts; Interest on borrowing incurred in order to acquire shares Total receipts (No deductions are allowed) Employment Income Employment income = total employment receipt employment income deductible amount (Total receipts) minus (Necessary deductible expenses) and (A special deduction) (Total receipts) minus (Expenses paid in order to acquire the receipts concerned) and (A special deduction) (Total receipts) minus (Necessary deductible expenses) Note: Government pensions are calculated as follows; (Total receipts) minus (The government pensions deduction) (The employment income deductible amount is equivalent to the necessary expenses in other income.) Use the table on the right to calculate employment income from total employment receipt. Regarding total employment receipt from 1,628,000 to 6,599,999, fractions are processed in units of 4,000. (This is shown in the table as a. ) Employment Income Calculation Table Employment receipt (A) Employment income Under 651,000 0 Over 651,000 1,618,999 A 650,000 Over 1,619,000 1,619, ,000 Over 1,620,000 1,621, ,000 Over 1,622,000 1,623, ,000 Over 1,624,000 1,627, ,000 Over 1,628,000 1,799,999 a 0.6 Over 1,800,000 3,599,999 a ,000 Over 3,600,000 6,599,999 a ,000 Over 6,600,000 9,999,999 A 0.9 1,200,000 Over 10,000,000 11,999,999 A ,700,000 Over 12,000,000 A 2,300,000 Ex. If total employment receipt is 1,769,211: 1,769,211 4,000 = (Round off the fractions.) 442 4, 000 = 1,768,000 (= a) 1,768, = 1,060,800 (= employment income)

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32 Deduction from Income The deduction from income is intended to achieve reasonable taxation depending on the condition of each taxpayer. Taken into consideration is, if you suffered losses from disaster, you had expenditures for medical or dental care, and you had a spouse qualifying for deduction and a dependent qualifying for deduction, etc. Applicable status is decided December 31 in the previous calendar year (whether or not you have a spouse and dependents, you are a physical handicapped person, you are a widow (widower), etc.). Basic Deduction The applicable requirement This deduction is applied to all taxpayers. The amount of basic deduction 330,000 Deduction for a spouse The applicable requirement A spouse who is eligible for deduction (see page 20) Inapplicable conditions in the status of a spouse qualifying for deduction is as follows; A spouse who is not a lawful spouse Spouse who is a family business employee for tax purposes A spouse is allowed deduction for dependents from other taxpayers The amount of deduction for a spouse The amont of this deduction is as follows; A general spouse qualifying for deduction 330,000 An aged spouse qualifying for deduction (whose age is 70 years old or older on or before January 1st in the taxable year.) 380,000 Special deduction for a spouse The applicable requirement A person whose total income in the previous year was less than 10 million and whose spouse living in the same household had a total income in the previous year of less than 760,000 Inapplicable conditions in the status of a special deduction for a spouse are as follows; A spouse who is eligible for the spouse s deduction (see page 20) (In this case, the spouse s deduction is applicable.) A spouse who is not a lawful spouse Spouse who is a family business employee for tax purposes A spouse is allowed deduction for dependents from other taxpayers A spouse is allowed special deduction for a spouse who is not allowed another one of these deductions The amount of special deduction for a spouse the amount of this special deduction is computed in proportion to total income of a spouse. The maximum amount of this deduction is 330,000 Deduction for dependents The applicable requirement A dependent family member (see page 20) (However, the deduction for dependents is not applicable in the case of dependents aged under 16 years.) Inapplicable conditions in the status of a dependent qualifying for deduction is as follows; A dependent is allowed deduction for dependents with other taxpayers The Amount of deduction for dependents The Amount of this deduction is as follows; In the case of dependents aged 16 years or over and under 19 years, and dependents aged 23 years or over and under 70 years, the deduction is 330,000 per person. In the case of dependents aged 19 years or over and under 23 years, the deduction is 450,000 per person. In the case of dependents aged 70 years or over, the deduction is 380,000 per person. In the case of parents, etc. aged 70 years or over living together with the taxpayer, the deduction is 450,000 per person. Deduction for disabled persons The applicable requirement If you, your spouse or your dependents are in the category of physically handicapped person, you may deduct this deduction The amount of deduction for physically handicapped persons In the case of an ordinary disabled person, the deduction is 260,000 per person. In the case of a special disabled person, the deduction is 300,000. In the case of a special disabled person living together with the taxpayer, the deduction is 530,000 per person.

33 Deduction for social insurance premiums The applicable requirement If you paid premiums (for welfare Annuity Insurance, National Health Insurance, etc) during the preceding year, and if the premiums are paid for you, your spouse or other relatives in your household, you may deduct this deduction The amount of deduction for social insurance premiums The amount of this deduction is the amount of these premiums Deduction for medical expenses The applicable requirement If you had expenditure for medical or dental care for yourself, your spouse or other relatives in your household during the preceding year, you may deduct this deduction The amount of deduction for medical expenses The amount of this deduction is computed as follows; Amount of Medical Expenses paid Amount reimbursed by insurance, etc remainder borne by Taxpayer by Taxpayer Total amount of various types of income retirement income Remainder Borne Lesser of ( 100,000) or Amount of Deduction for Medical Expenses (Caution: This deduction is not more than 2,000,000.) Deduction for life insurance premiums The applicable requirement If you paid general life insurance premiums, nursing care insurance premiums, or individual pension insurance premiums during the preceding year, you may apply this deduction. The amount of deduction for life insurance premiums, etc. The amount of the deduction is determined according to the date of contract conclusion and amount of premiums paid. Maximum amount of deduction Life insurance contract, etc. concluded on or after January 1, 2012 If only general life insurance premiums 28,000 If only nursing care insurance premiums 28,000 If only individual pension insurance premiums 28,000 If all premiums 70,000 Life insurance contract, etc. concluded on or before December 31, 2011 If only general life insurance premiums paid 35,000 If only individual pension insurance premiums paid 35,000 If both of these premiums paid 70,000 Deduction for earthquake insurance premiums The applicable requirement If you paid earthquake insurance premiums or old long-term casualty insurance premiums during the preceding year The amount of deduction The amount of deduction is calculated according to the premiums paid. The maximum amount of this deduction: In the case of earthquake insurance premiums only 25,000 In the case of old long-term casualty insurance premiums only 10,000 In the case of paying both 25,000 Deduction for working students The applicable requirement If you are a taxpayer of inhabitant tax, and you were a working student as of Dec. 31 in the preceding year, you may claim the deduction for a working student, who meets both of the following requirements; (a)a student, whose income other than that earned by his or her own labor, is not more than 100,000 (b)a student, whose total income is not more than 650,000 The amount of deduction for a working student 260,000 In addition to the deduction from these incomes, there are other deductions which are deduction for casualty losses, deduction for small business mutual aid premiums, and deduction for widow/widower on inhabitant tax.

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38 Tax Rate of The Per Income Rate (Table) Special City Inhabitant Tax Metropolitan Inhabitant Tax Tax Rate 6% 4% Computation Method (How to calculate the per income rate) The computation method of per income is as follows: The amount of income rate of special city individual inhabitant taxtaxable income The amount of income rate of metropolitan individual inhabitant taxtaxable income

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40 Deduction from Tax (Tax Credits) The deduction from tax is deductions within the taxation system in which a specific amount is deducted from tax amount of individual inhabitant tax, which is calculated by the taxation method. Deduction for Dividends If you received dividends from a corporation that has its head oce in Japan, you are deducted a portion of the dividends income. The amount of this deduction is deducted from both the amount of per income rates; one is a special city individual inhabitant tax and the other is metropolitan individual inhabitant tax. Credit for foreign taxes If any foreign tax corresponding to the Japanese income tax and inhabitant tax under the laws of foreign country is imposed on you, the foreign tax may be deducted from your Japanese income tax and inhabitant tax within the limit. Adjusted deduction In order to make adjustments with increased burdens based on the dierence of personal deduction amounts (basic deduction, deduction for dependents, etc.) between the income tax and the inhabitant tax pursuant to the change in the tax rates of the income tax and the inhabitant tax from 2007, a sum calculated by a xed method is subtracted. Deduction for dividend income and capital gains derived from transfer or sales of stocks etc. If the taxpayer, whose tax is withheld at the per dividend rate or at the per capital gains derived from transfer of sales of stocks etc. rate, choses to declare his said income, the amount of dividend rate and capital gains rate will be deducted from the amount of his said income rate. In the case of any amount that cannot be fully deducted from the per income rate amount, appropriations are made for the current scal year tax amount, such as the per capita rate, and unpaid inhabitant s tax, and the remainder refunded. Special tax deduction for housing loans, etc. People who entered their homes in the period from 2009 to December 31, 2021 received a housing loan deduction on their income tax. If they were not able to deduct the full amount from their income tax, an amount calculated by a xed method can be subtracted from their inhabitant tax (income rate) for the following scal year. Deduction for donations Regarding the portion of donations described below exceeding 2,000, from scal 2012 a sum calculated by a certain method is deducted from the inhabitant tax income amount. Donations to prefecture or municipality Donations to prefectural community chest in area of residence Donations to Japan Red Cross Society branch in area of residence Donations to organizations designated by ordinance of the prefecture or municipality in area of residence If donations in above exceed 2,000, a special deduction is also applied.

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42 Filing A Return for Individual Inhabitant Tax The amount of the inhabitant tax is calculated and every taxpayer is notified for payment of tax. These affairs are conducted by the special city office. The tax section staff of the special city office request taxpayers to make a declaration of their income. Who must file Any person who lives in a Special City If you live in a special city jurisdiction on January 1 in the taxation year, you are required to file the inhabitant tax return to the special city office. The following people do not need to fill out an inhabitant tax return: A person who has filed a final return of income tax A person who earned only employment income in the preceding year, and whose information concerning the return of income payment after the year-end adjustment has been submitted to the administrative special city office by his or her employer A person whose income of the preceding year was derived only from government pensions and the like and whose information on the return of public pensions has been submitted to the administrative special city office by the pensions payer A person whose total income of the preceding year do not exceed the amount calculated by the method as follows; 350,000 A qualifying spouse for deduction Number of dependents for deduction 1 210,000 (The last 210,000 is not added if the taxpayer has no spouse or dependents qualifying for deduction) A person who has no domicile in the special city but has his or her own office, work place and property People who have their office, work place, and/or a house and property inside the special city as of January 1st, but have no domicle are required to fill in a final return with the address of their office, work place, and/or house and lot. And the person has to fill in a final return with other facts for the taxation of individual inhabitant tax. Where to file Your return must be filed at the special city office where your domicile place, address of your own office, work place, etc. is administered. Cut-off date Please file return of individual inhabitant tax no later than March 15 each year.

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44 How to pay inhabitant tax (About the payment of inhabitant tax) The individual inhabitant tax is collected in two ways, one is the general collection and the other is the system of special collection. The general collection This system is for people who have to pay their tax by themselves, not for those whose tax is withheld by their companies. If this system applies to you, you will receive a notice of inhabitant tax with a payment slip from the special city office. You are required to pay the individual inhabitant tax in four installments. The payment deadlines are as follows: 1st period: By June 30 2nd period: By August 31 3rd period: By October 31 4th period: By January 31 The system of special collection This is the procedure of individual inhabitant tax payment for employment income earners. (This system applies to the payee who earns salaries and wages.) Under this system, the payer of employment income (the company, etc.), on the basis of notification from the special city office, subtracts the tax amount from the salary paid every month (from June to May of the following year) and pays the amount to the special city office by the 10th of the following month. In this case, the taxpayer is notified through the employer (the payer) of the amount of individual inhabitant tax. The Notification of the amount withhold inhabitant tax, which is issued by special city office, will be included. This system of special collection and employers (payers) are called special collecting agent of inhabitant tax with an obligation or special collecting obligor in this system. When a taxpayer retires in the middle of the payment term Under the special collection system, the inhabitant tax is subtracted from the salary in 12 installments from June to May of the following year. Therefore, if the taxpayer retires from the company midway through this period, the inhabitant tax payments for the following month and thereafter remain. So there are three methods to pay the balance; In the case of continuing the system of special collection If you get a position in another company, you may apply the system of special collection. The rest of these taxes go on being deducted from your payment. When the taxpayer retires, the special collecting obligor collects all the rest of individual inhabitant tax from his or her salary, wages or retirement allowance at one time. And the obligor must pay those taxes to the special city office. In the case of change to the general collection A taxpayer who does not do the procedures of and need to pay tax as general collection, according to the Notice of inhabitant tax and Payment Slip issued by the special city office. A system of special collection from public pensions, etc. began in October Under this system, based on certain conditions, the pension beneficiary arranges for the inhabitant tax to be subtracted from the pension payment each time and paid to the special city office.

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46 Special Treatment of Taxation on Retirement Income When a retired person receives retirement allowance, the payer of the allowance should calculate the sum of the tax imposed on the allowance, separate it from the tax on other income, and deduct the sum from the allowance. Computation method to the amount of inhabitant tax in this case Per Income Rate on Retirement income Amount of Retirement Tax Rate10 Income Amount of Deduction for Retirement Income Retirement Allowance, Etc. Income 2 Amount of Retirement In this case, such aggregate taxation as basic deduction, deduction for spouse, deduction for dependents and other deduction are inapplicable. If the retired person served as a company director, etc. for a period of five years or less, the above formula of dividing the retirement income by half is not applicable. Deduction for retirement income The amount of deduction for retirement income is as follows; Years of service 20 years or less Deduction 400,000years of service (If the calculated deduction amount is less than 800,000, it is deemed to be 800,000.) over 20 years 8 million 700,000(years of service 20years) Note: In the case of a taxpayer who is forced to retire because he or she has become a handicapped person, 1,000,000 is added to each of the deduction amounts calculated as specified in the above table.

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48 International Tax Treaties As the exchange of persons and goods with foreign countries has become more frequent, agreements about taxation have become more important. Troubles such as double taxation by different countries may become an obstacle to international communication. To prevent such matters, Japan has held conventions for the avoidance of double taxation and others with over 60 countries. The conventions are formally called Treaty between Japan and XXXXX (a country) for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income or Treaty between Japan and XXXXX (a country) for the Avoidance of Double Taxation with respect to Taxes on Income. Those are generally called Tax Treaty. Some of them include provisions about inhabitant taxes, and there are some cases of exemption, which is judged by the occupation of the income-earner and the category of income. However, the contents of conventions have many differences and the treaty provisions are very complicated. Each case should be judged separately according to the country concerned.

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50 List of City Offices City Office Address Telephone Numbers Adachi City Office Chuo-Honcho, Adachi-ku Arakawa City Office Arakawa, Arakawa-ku Itabashi City Office Itabashi, Itabashi-ku Edogawa City Office Chuo, Edogawa-ku Ota City Office Kamata, Ota-ku Katsushika City Office Tateishi, Katsushika-ku Kita City Office Oji-Honcho, Kita-ku Koto City Office Toyo, Koto-ku Shinagawa City Office Hiromachi, Shinagawa-ku Shibuya City Office Shibuya, Shibuya-ku Shinjuku City Office Kabuki-cho, Shinjuku-ku Suginami City Office Asagaya-Minami, Suginami-ku Sumida City Office Azumabashi, Sumida-ku Setagaya City Office Setagaya, Setagaya-ku Taito City Office Higashi-Ueno, Taito-ku Chuo City Office Tsukiji, Chuo-ku Chiyoda City Office Kudan-Minami, Chiyoda-ku Toshima City Office Minami-Ikebukuro, Toshima-ku Nakano City Office Nakano, Nakano-ku Nerima City Office Toyotama-kita, Nerima-ku Bunkyo City Office Kasuga, Bunkyo-ku Minato City Office Shiba-Koen, Minato-ku Meguro City Office Kamimeguro, Meguro-ku

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52 Inhabitant Tax of The 23 Special Cities in Tokyo Edited and Published by The Society of Special City Tax Section Chiefs Published by Gyosei, Co. Ltd Shinkiba, Koto-ku, Tokyo Tel.: (main number)