THE INCOME OF THIS YEAR IS LOWER THAN BEFORE – CAN EMPLOYEES APPLY FOR A RESIDENCE TAX DISPENSATION?

Can laborers apply for a residence tax deduction when this year’s earnings are less than the previous year’s?” is one of the questions that are more interesting to foreigners working in Japan. The resident tax is a popular tax for most residents having a job here (such as overseas students, engineers or housewives doing part-time jobs and so on). So what is the resident tax dispensation, the conditions to receive these benefits or which steps do the procedure include. This article will access some important information concerning this topic.     

What is the resident tax exemption? 

“The resident tax exemption” policy is set up to assist low-income earners to remove the tax burden by the Japanese Government. Each locality will have different regulations regarding procedures and the proportion of tax exemption. For example, the authority in some places adopted this policy with a 100% deduction, however, others only agree to reduce it to 30-50% of the total resident tax.  

So who is the resident tax exemption applied?

• First of all, employees in the period of receiving unemployment insurance.
• Secondly, employees have lower income than last year. 
• Thirdly, disabled people or citizens are out of working age. 
• Fourthly, people impacted by natural disasters.
• Finally, workers send money to caregivers. 

Not all laborers working in Japan can recognize that they are eligible for resident tax exemption so this information that HSB JAPAN will mention below partly helps everyone better understand tax deduction and concerned procedures. Since then, workers will have a clear orientation in completing the procedures for applying for tax exemption.  

The procedures for applying for the resident tax exemption 

Although each locality has distant regulations about the procedure, method of application, it is compulsory that employees need to know the following essential documents to submit an application for resident tax exemption: 

• Labor status certificate or proof that you are receiving unemployment insurance.
• Income certificate 
• Balance confirmation

Of course, before submitting an application for a residence tax exemption, you can get in touch with the local resident tax office to review certain essential details like: 

• Does the local government have the policy to reduce the resident tax? 
• What criteria must you meet to qualify? 
• When can you begin to engage in the resident tax exemption? 

Although the Japanese government adopted many policies to support disadvantaged people regardless of whether they are natives or foreigners, a few people working here understand their own rights. In response to this issue, HSB JAPAN was founded with the goal of offering the best advisory services for foreign workers in Japan who have a demand to receive tax refund/dispensation, supporting clients in obtaining the highest amount.