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  • 執筆者の写真Shinji Nakajima

2.Basic five rules in tax & accounting in running corporation.(2/5)

Chapter 2: Withholding tax system (income tax)



1.Articles 6 of income tax act states as following.


"Persons who pay salaries (Employment income) or remunerations subject to income tax withholding at source shall be liable to withhold the amounts to be paid, pursuant to this Act.

In the case where a withholding agent pays salaries or other remunerations subject to income tax withholding at source, is obliged to withhold income tax and pay it by the statutory due date of payment."



2.Japan employs the “withholding tax system”.


For certain type of income for certain beneficiary, the payer (the employer) of the income is required to pay income tax withheld at the time the income is paid under the “withholding tax system.”


Kinds and scope of income subject to withholding tax are as follows;

(1) Salary, bonus, retirement benefit, offiicers’ salary

(2) Professional fees to lawyers, certified public accountants, certified tax

accountants, etc.

(3) Compensation for articles and translation, etc.

(4) Dividends

(5) Professional sports players

(6) Others


For salary workers, withholding tax system requires their employers to withhold a portion of salary as income tax.


Withholding income taxes and payment of withheld income tax to tax authority is the responsibility of the payer (the employer) of the income rather than the payee (employee).



3.Payment of withheld income tax


Employers are obligated to pay withholding income tax for the current month to the tax office by the 10th of the following month (in cases where exceptional permission is received, by July 10 and January 20 in the following year) .



4.Calculating withholding income tax amount monthly


The amount of income tax and special income tax for reconstruction withheld from salary, bonuses, etc. can be determined by using the Tax Amount Table prescribed by the Minister of Finance (public notice by the Ministry of Finance).






NAKAJIMA TAX & ACCOUNTING OFFICE provides one-stop “Accounting”, “Taxes”, and “Payroll” outsourcing service for foreign companies starting up business in Japan and foreign founders starting up business in Japan.


NAKAJIMA TAX & ACCOUNTING OFFICE also assists to prepare year-end Financial Statements closing and e-filing Corporate Tax Return and Consumption Tax Return.


Please check our disclaimer. Please note that the content is only information at the time of posting, and the content will not be updated even when laws are revised.

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