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Personal Income Tax


Outline of Personal Income Tax個人所得税の概要


The income tax is a tax imposed on your salaries received from your company or money earned in your own business, etc. The remaining amount after deducting necessary expenses from the money (revenue) you have earned for one year is the “income” as a base for calculation of the amount of the income tax. For calculation of the tax amount, a certain amount is additionally deducted from such income (hereinafter called “deduction”) in accordance with your situations such as family structure. The higher the income after the deduction is, the higher the applicable tax rate is (it is called “progressive tax rate”). Under this taxation system, the authorities may request you to bear a burden in accordance with your income amount and give careful consideration to you in accordance with your situations such as family structure.

Filing of Personal Income Tax Returns個人所得税の確定申告


There are various types of personal incomes such as employment income, income from transfer of assets including shares, cryptocurrencies and gold and income from transfer of real estate including housing. They are classified into 10 types of incomes (business, real estate, interest, dividend, salary, miscellaneous income (public pension, service, other income), transfer, temporary income (lump-sum payment of life insurance, prize, etc.), mountain forest, retirement). These 10 types of incomes may be divided into 2 categories: the income calculated based on the comprehensive taxation system and the income calculated based on the separate taxation system.
The comprehensive taxation system is a method whereby the tax amount to be paid is calculated by totaling any and all incomes for one year, deducting the amount of income deduction from such total incomes and then multiplying the remaining amount by the tax rate. In regard to the business income for which sole proprietors or freelancers mainly file tax returns, the tax amount is calculated by adding up any and all incomes including income from real estate and miscellaneous income based on the comprehensive taxation system. On the other hand, the separate taxation system is a method whereby the tax amount to be paid is calculated by multiplying each income by the tax rate, not including other incomes. The progressive taxation system applies to the income tax rate. Different tax rates are set in accordance with each of 7 stages into which the amount of taxable income is classified. Under the progressive taxation system, the higher the income is, the higher the income tax rate is. The amount of income tax is calculated by classifying the amount of taxable incomes of a taxpayer into the prescribed stages, multiplying each amount by the tax rate of the applicable stage and then totaling all tax amounts. We support your appropriate tax payment by utilizing various income deductions including deductions under the small-scale mutual aid system, iDeCo (Individual-type Defined Contribution pension plan), hometown tax donation program (called “furusato nozei”) or self-medication program as medical expense deduction.