Your tax status in Japan depends largely on your nationality, the length of your stay and your occupation in Japan. If you do not qualify for exemption from taxes in Japan, the terms and conditions of employment on the JET Programme allow for a higher gross salary to cover Japanese tax payments.

It is important to note that first and second year Canadian and New Zealand ALTs, all third year ALTs, and all CIRs and SEAs of all nationalities are liable for tax in Japan.

If your gross income is more than \300,000 and no tax deductions are made, ask your supervisor to explain your pay slip to you. You might be expected to pay a lump sum directly to Japanese tax officials later in the year.

If you are paying tax in Japan, it is important to obtain a breakdown of your tax payments (Statement of Earnings) from your Contracting Organisation. This statement can be called either: gensen choshu ni kakaru shotokuzei no nozei shomei negai or kyuryo shotoku no gensen choshu hyo. If your visa type and nationality exempts you from paying Japanese taxes, the statement may also be called kyuyo shiharai hokokusho.

Tax matters in Japan require very little paperwork. If exempted from paying tax in Japan, you have to file a form that confirms exemption, and you may be required to fill out a questionnaire for your local tax office. You should also be sure to keep your gensen choushu hyo or Statement of Earnings (a small slip of paper which will appear in your December pay packet; see example in GIH pg.111), as it may be necessary for visa, tax and other matters. The gensen choshu hyo details your income, tax you pay and how much you contribute to Social Insurance and Pension. JETs who have to file tax returns in their home country need this, as do all re-contracting JETs who apply for an extension on their visa.

The gensen choushu hyo details all information valid within one calendar year (January to December) so first year JET participants probably will receive a statement only for income earned from August to December. However some Contracting Organisations treat the JET participant's income according to the JET year (from August to July the following year) and will prepare the gensen choushu hyo at the end of the JET year in June or July. If you need the gensen choushu hyo early for some reason or your Contracting Organisation cannot prepare it formally, then ask for the same information written and stamped with your Contracting Organisation’s official seal.

Those JET participants eligible for tax exemption in Japan according to the information in the previous section should make sure they fill out forms for tax exemption (examples in the GIH). Your Supervisor will present you with these forms for signing shortly after you arrive.

Tax exemption forms are produced by the Ministry of Finance. Some forms may have both English and Japanese (front and back) and some forms may have only Japanese. Both forms are valid, however the forms may have a slightly different layout. If you are unsure about your tax exemption form, compare it to the example forms provided in the GIH. If they are the same, the English translation should be as in the example.

For U.S. JET participants (ALTs), in order to be exempt from paying Japanese tax, Form 6166 (issued by the IRS), certification of U.S. residency, must be submitted together with the Tax Exemption Form. Please see Tax Information for US ALTs and the IRS website (www.ips.gov) for information on how to acquire Form 6166. U.S. JET participants (ALTs) are encouraged to acquire Form 6166 before coming to Japan.

Please Note: Those who are exempt from tax in Japan are exempt for two years only. If staying on the programme for a third year, those participants will be required to pay tax in Japan. All participants who are required to pay tax in Japan have their gross salary upwardly adjusted to cover the amount of tax owed.

JETs who are liable for income taxes will likely be liable for inhabitant taxes also. Inhabitant taxes are calculated based on the previous year’s income in Japan.

The inhabitant tax bill is delivered around June for the previous January to December’s income. However, even when you are liable for taxes your first year (as are CIRs and SEAs), inhabitant taxes are generally not required in the calendar year in which you arrive. So, if you arrived in July 2006, you will have inhabitant taxes due in 2007.

Contracting Organisations generally handle payment of your inhabitant taxes in one of three ways:

It is very important to confirm whether you will be liable for inhabitant taxes, and if so which method your Contracting Organisation is using. If you receive more than the usual \300,000 after income taxes have been deducted, this money may have to be set aside for your inhabitant taxes. Ignore this, and you may find yourself with a large inhabitant tax bill and no funds to pay it. Please clear this up early on, and check on it from year to year to be sure it has not changed.

Inhabitant taxes are decided in accordance with your income, and vary from area to area. Once again, your JET income of \3,600,000 is after income and inhabitant taxes have been paid, so you need not worry about the rate, only the payment method.