Tax Cycle in Japan (2025) 🇯🇵
Japan follows an annual tax cycle based on the calendar year (January 1 – December 31) for both individuals and businesses. The tax system includes income tax, corporate tax, consumption tax, and social insurance contributions. Below is a detailed breakdown of the tax cycle in Japan for employees, freelancers, and businesses.
1. Income Tax Cycle for Employees (Salary Earners)
| Stage | Period | Description |
|---------------|--------------|---------------|
| Tax Year | January 1 – December 31 | Personal income is calculated for the entire calendar year. |
| Monthly Withholding Tax (源泉徴収) | Every month | Employers deduct income tax from salaries and pay it to the tax office. |
| Year-End Adjustment (年末調整) | December | Employers adjust tax based on total earnings, deductions, and dependent status. Employees submit forms like 扶養控除申告書 (Declaration of Dependents). |
| Final Salary Tax Payment | December – January | The employer either refunds excess tax or deducts additional tax. |
| Annual Tax Return (確定申告, Kakutei Shinkoku) (if required) | February 16 – March 15 | Required for high earners (over ¥20 million), freelancers, or those with additional income (real estate, stocks, foreign income). |
| Tax Payment Due Date | March 15 | Deadline to pay any additional tax owed. |
| Tax Refund (if applicable) | April – May | If you overpaid, refunds are processed by the tax office. |
💡 Most regular employees do not need to file a tax return because their employer handles withholding and adjustments.
2. Income Tax Cycle for Freelancers & Side Jobs (Self-Employed)
| Stage | Period | Description |
|---------------|--------------|---------------|
| Tax Year | January 1 – December 31 | Income and expenses for the year are recorded. |
| Provisional Tax Payments (予定納税, Yotei Nouzei) | July & November | If previous year’s tax exceeded ¥150,000, advance payments are required. |
| Final Tax Return Filing (確定申告, Kakutei Shinkoku) | February 16 – March 15 | Submit income, deductions, and pay tax owed. |
| Tax Payment Due Date | March 15 | Deadline for final tax payment. |
| Consumption Tax Filing (消費税, Shohizei) (if required) | March 31 | Required for businesses earning over ¥10 million annually. |
💡 Freelancers must keep detailed records and may opt for Blue Tax Return (青色申告) benefits.
3. Corporate Tax Cycle (Companies)
| Stage | Period | Description |
|---------------|--------------|---------------|
| Tax Year | Determined by company | Most companies follow April 1 – March 31 or January 1 – December 31 fiscal years. |
| Corporate Tax Return (法人税申告書) | Within 2 months after fiscal year-end | Companies must file and pay corporate income tax. Extensions available. |
| Consumption Tax (消費税) Payment | March 31 (if December fiscal year-end) | 10% VAT collected from sales, paid to tax authorities. |
| Provisional Tax Payments (予定納税) | Twice a year | If last year’s tax exceeded ¥200,000, advance payments are required. |
💡 Large companies file quarterly, while small businesses may file annually.
4. Social Insurance & Local Tax Cycle
| Tax Type | Payment Cycle | Details |
|-------------|----------------|------------|
| Social Insurance (社会保険, Shakai Hoken) | Monthly (Employer Deducted) | Includes health insurance, pension (厚生年金), employment insurance (雇用保険). Paid by employer & employee. |
| Resident Tax (住民税, Juminzei) | June - May (Next Year) | Based on last year's income, billed by local government. |
| Fixed Asset Tax (固定資産税, Kotei Shisanzei) | April, July, December, February | Tax on real estate, paid quarterly. |
💡 Resident tax (住民税) is not deducted from salary until the following year, so expect a bill in June 2025 for 2024 earnings.
5. Important Tax Deadlines for 2025 (令和7年)
| Tax Type | Deadline |
|-------------|------------|
| Annual Income Tax Return (確定申告) | March 15, 2025 |
| Corporate Tax Return (法人税申告書) | 2 months after fiscal year-end |
| Resident Tax (住民税) Payment Start | June 2025 |
| Consumption Tax (消費税) Filing | March 31, 2025 |
| Fixed Asset Tax (固定資産税) 1st Payment | April 2025 |
6. Summary: Who Needs to File a Tax Return?
| Category | Filing Required? |
|-------------|-----------------|
| Regular Salary Employee | ❌ No (Employer handles tax) |
| Employee with Side Income (Over ¥200,000) | ✅ Yes (Self-file) |
| Freelancer (Self-Employed) | ✅ Yes (Must file) |
| Foreign Resident Leaving Japan | ✅ Yes (Before departure) |
| Company (Corporate Tax) | ✅ Yes (File within 2 months of fiscal year-end) |
7. Conclusion
- Employees → Employers handle taxes (except for extra income).
- Freelancers/Self-Employed → Must file tax returns annually.
- Businesses → File corporate tax based on fiscal year.
- Social Insurance & Local Tax → Separate from national tax, billed by local authorities.
💡 Need help with tax filing, deductions, or resident tax in Japan? Let me know! 😊