Q&A on Municipal and Prefectural Resident Tax (市県民税Q＆A)

We have compiled frequently asked questions and answers about municipal and prefectural resident tax (resident tax).

I moved out of Higashihiroshima City on March 10 this year. In June, I received a tax notice from Higashihiroshima City. Isn’t resident tax supposed to be paid to the municipality of my current address?

Answer

Individual municipal and prefectural resident tax is imposed for that financial year starting in June by the municipality where you had your address as of January 1 each year (called the ‘assessment date’).

Therefore, even if you move to a new municipality after the assessment date, you will still be taxed by Higashihiroshima City for the entire year. Taxation by your new municipality will begin from the following June. Income certificates are also issued by the municipality where you had your address as of January 1 of the relevant financial year.

My resident registration remains in Higashihiroshima City, but I am living alone in another city because of a work transfer. Will I be taxed in Higashihiroshima City or in the city where I am actually living?

Answer

As a general rule, resident tax is imposed by the municipality where your resident registration was located on January 1, the assessment date.

However, if you have not changed your registered address but are actually living in another municipality, resident tax may be imposed by the municipality where you are actually living.

The decision as to which municipality has taxing authority is based on where your actual day-to-day life is centered and where your principal place of living is located. This is because resident tax is considered a tax paid in return for resident services provided in the place where you actually live.

For example, if you are living outside Higashihiroshima City due to a solo work assignment or schooling, but return every weekend to your family in Higashihiroshima City, then Higashihiroshima City is considered your principal place of living.

When completing year-end tax adjustment documents, final tax returns, or resident tax declarations, please enter the address where you were actually living on January 1. Municipalities coordinate with one another to prevent double taxation in cases where a person’s registered address and actual place of residence differ.

If you receive tax notices for the same financial year from two or more municipalities, there is a possibility of double taxation. Please contact the municipalities that sent the notices.

I retired from my company. Until now, my resident tax was deducted from my salary. How will it be handled after retirement?

Answer

For salaried employees, resident tax is deducted from salary over the 12-month period from June to May of the following year. This is called special collection. If you retire and resident tax can no longer be deducted from your salary, it will be paid by one of the following methods.

In either case, the payment method changes when your employer submits a change notification form to City Hall.
(The form can be printed from the page for downloading special collection application forms, etc.)

Download forms such as the Notification of Changes Related to Special Collection（Japanese）

Lump-Sum Collection

This means the remaining tax is deducted all at once from your final salary or similar payment.
If your retirement date is between June 1 and December 31, lump-sum collection is made if you request it.
 If your retirement date is on or after January 1, lump-sum collection is required regardless of your wishes.(However, if the unpaid tax amount is greater than the salary being paid, lump-sum collection cannot be made.)
If lump-sum collection is made, no revised tax notice will be sent.

Ordinary Collection

This means payment by bank transfer or payment slip at a financial institution, etc.
For example, if resident tax for June through October has already been deducted from your salary when you resign, then the portion from November through the following May will be switched from special collection to ordinary collection.
A tax notice will later be mailed to your home.

Please note that resident tax for the following financial year is based on the income you earned in the year you retired. Even if your income decreases after retirement, if your income in the year of retirement was high, resident tax will still be imposed accordingly.

Also, if year-end tax adjustment could not be completed due to your retirement, deductions such as dependent deductions may not be reflected, and your resident tax for the following year may be higher. You may file a final tax return or resident tax declaration. Please contact the city for details.

Resident tax on retirement income is generally withheld from the retirement payment at the time it is paid and remitted by the employer to the City Office.

I changed jobs, and a resident tax notice was sent to my home. I would like my resident tax to be deducted from my salary at my new workplace. What should I do?

Answer

If your previous employer did not submit a notice to City Hall stating that special collection would continue at your new employer, your resident tax collection method is temporarily changed to ordinary collection, and a tax notice is sent to your home. (Please refer to Q2.)

If you would like special collection to begin at your new employer, your new employer must submit an Application for Change to Special Collection for Municipal and Prefectural Resident Tax to City Hall. Please consult the payroll staff at your new workplace regarding the procedure.

(The application form can be printed from the page for downloading special collection application forms, etc.)

 Download forms such as the Notification of Changes Related to Special Collection（Japanese）

However, please be aware that any amounts under ordinary collection for which the payment deadlines (1st through 4th installments) have already passed cannot be switched to special collection.

I will be going to the United States on an overseas assignment. What happens to my resident tax?

Answer

A person who had an address in Japan as of January 1 (the assessment date) is subject to municipal and prefectural resident tax in the municipality of that address.

Therefore, even if you leave Japan on or after January 2, you will still owe resident tax if you had income above a certain level in the previous year.

Resident tax notices for ordinary collection are sent in June, so if you are leaving Japan before then, you must appoint a tax agent in Japan to receive the tax notice on your behalf. The tax agent can be anyone, including a corporation. Before leaving Japan, please submit a Tax Agent Declaration Form to City Hall.

However, people who stay outside Japan for more than one year, or whose actual life base is recognized as being overseas, are not subject to resident tax in Japan.

Please refer to the information on the tax agent system.

 About the Tax Agent System

My income this year is almost the same as last year, but my tax seems much higher. Why is it different?

Answer

Resident tax is not determined by income alone. It can also change significantly depending on the details of your income deductions (such as medical expense deductions, social insurance premium deductions, spouse deductions, dependent deductions, etc.).
(Please also refer to the page on types of deductions.)

  Types of Deductions (Japanese)

Even if your income increases only slightly, you may lose eligibility for certain tax relief measures if you exceed specified thresholds for age, income, or other conditions.
(For details, please check the overview of municipal and prefectural resident tax.)

In addition, your tax may be calculated higher than usual in the following cases:

• You did not undergo year-end tax adjustment because of retirement, etc.
• You did not file a tax return (final return or resident tax declaration)
• You filed year-end adjustment or a tax return, but your income or deductions were not correctly reported

Even after receiving your resident tax notice, it may still be possible to correct the taxation details by submitting a return.

If you have questions about your resident tax amount, please contact the Municipal Tax Division. When inquiring by phone, you will be asked for your notice number, so please have your tax notice ready.

I do not understand the difference between ‘financial year ____’ and ‘income for year ____.’

Answer

Resident tax is imposed in the following financial year based on income earned during the calendar year in question.

For example, the calculation of resident tax for the 2023-24 financial year (April 2023 to March 2024) is based on such documents as the withholding slip for 2022 income and the final tax return for 2022 income.

When applying for a taxation certificate (income certificate), please make sure which financial year and which income year the receiving organization requires.

For example, a taxation certificate for the 2023 financial year shows income details for 2022 (January to December 2022).

I had income during the previous year, but even though it is already June, I have not received a resident tax notice. Why not?

Answer

There are several possible reasons:

You are exempt from resident tax

Even if you had income during the previous year, you may still be exempt from resident tax.
Please refer to the overview of municipal and prefectural resident tax for details.

Your resident tax is collected only through special collection (salary deduction)

If all of your resident tax is deducted from your salary, the city sends the tax notice to your employer rather than to your home. The employer then gives the notice to you.
(However, if you also have income other than salary and part of your tax is paid by ordinary collection, a tax notice will be mailed to your home.)

Mail could not be delivered due to an unknown address

Tax notices are sent to the address known to the city.
If you moved without completing address change procedures, or if there is no nameplate, the mailed notice may not reach you.

If you are unable to receive mail at your registered address for some reason, you can designate a mailing address by filing the appropriate notification.
Please refer to the information on changing your mailing address or name.

When your mailing address or name changes (Japanese)

I received more than one resident tax notice for the same financial year. Why?

Answer

There are several possible reasons.

You have multiple payment methods

If you have salary income and other types of income, your resident tax may be split between special collection from salary and ordinary collection.

In that case, even if you receive a special collection notice through your workplace, an ordinary collection notice may also be mailed to your home.
Please refer to the section on payment methods in the overview of municipal and prefectural resident tax.

Your payment method changed

If your payment method changed during the financial year, a new notice is issued.

The taxation details changed

If corrections or changes were made to your previous year’s income or deductions, a new tax notice will be issued.

This may result from:

• corrections made by the taxpayer (final return, resident tax declaration, revised year-end adjustment), or
• reassessment by the city based on its own investigation

(The reason for the change is stated on the tax notice.)

Double taxation by another municipality

If you receive notices for the same financial year from different municipalities, there may be double taxation for some reason.
Please refer to Q2 for details.

I retired from my job in February this year and got married. Even if I become my husband’s dependent, do I still have to pay resident tax?

Answer

Resident tax is imposed in June of the following year based on your income during the previous calendar year. Therefore, even if you become your husband’s dependent after marriage, you will still owe resident tax if your income in the previous year exceeded a certain amount.

Whether resident tax applies depends on your income and the contents of your deductions.

If your total income in the previous year exceeded ¥380,000 (or salary income of ¥930,000 if your income consisted only of wages/part-time earnings), you are taxable.
If you have dependents of your own, or if you are a minor, disabled person, widow, etc., different standards apply.

Please refer to the overview of municipal and prefectural resident tax for details.

Also, regardless of whether you are subject to resident tax, you may still qualify as a tax dependent of a relative if your total income in the previous year was ¥480,000 or less (or salary income of ¥1,030,000 or less if your income consisted only of wages/part-time earnings).

Please note that the requirements for being a tax dependent and for being a dependent under health insurance are different. For health insurance dependent eligibility, please ask your employer.

I received ¥5,000,000 in salary from Company A during the year, and Company A handled my year-end adjustment. I also received ¥150,000 in salary from Company B. Do I need to file?

Answer

If your year-end tax adjustment has been completed by your main employer, and the total salary income from your other employer(s) is ¥200,000 or less, you do not need to file a final income tax return.

However, you do need to file a resident tax declaration regardless of the amount. Please attach the withholding slips from each employer to your resident tax declaration form, combine the amounts, and enter the total salary income.

If neither Company A nor Company B performed year-end adjustment, or if the salary from Company B exceeds ¥200,000, you must file a final income tax return.

If Company B’s salary was already included in Company A’s year-end adjustment as income from a previous employer, then neither a final return nor a resident tax declaration is required.

Last year, in addition to my salary, I received about ¥100,000 in compensation (miscellaneous income). The tax office told me that if it is ¥200,000 or less, I do not need to file a final tax return. Do I need to file a resident tax declaration?

Answer

If your year-end tax adjustment has been completed by your main employer, and your other income is ¥200,000 or less, you do not need to file a final income tax return. However, you do need to file a resident tax declaration regardless of the amount.

Please list all income on your resident tax declaration form and attach your withholding slip for salary income and payment statements, etc. for the other income.

If income other than salary exceeds ¥200,000, or if year-end adjustment has not been completed for your salary, you must file a final income tax return. Also, even if you are not required to file a final return, you may still receive an income tax refund by filing one.

If you file a final income tax return, resident tax will be assessed based on the contents filed with the tax office, so you do not need to file a separate resident tax declaration.

I sold land last year and filed a final return with the tax office for capital gains income. I paid the income tax after filing the return, but how do I pay the resident tax?

Answer

Resident tax is imposed in the year following the year in which the income arose.
On page 2 of the final income tax return, in the section ’Matters Related to Resident Tax and Business Tax’, you can choose how resident tax on income other than salary income and public pension income will be paid.

(If you also have miscellaneous income from a public pension, the portion of the annual tax attributable to public pension miscellaneous income will be specially collected from the pension in either case.)

If you choose salary deduction (special collection), or if you make no selection

Resident tax on both salary income and other income will all be collected through special collection from salary. The tax will be deducted from your salary over the 12-month period from June to May of the following year.

If you choose self-payment (ordinary collection)

Around early to mid-June, an ordinary collection tax notice will be mailed to your home. You must pay it in four installments (June, August, October, and the following January) by bank transfer or payment slip at a financial institution, etc.

If tax on your salary income is already being specially collected by your employer, then only the portion attributable to income other than salary will be paid by ordinary collection.

If you forgot to choose a resident tax payment method on your final return, or made the wrong choice, you should file a resident tax declaration instead of correcting the final return.

The resident tax declaration form has the same section where you can choose the payment method and submit it to the Municipal Tax Division.

I heard that the deduction amount for dependents under age 16 became ¥0. If the deduction amount is ¥0, do I still need to list them on year-end adjustment forms or tax returns?

Answer

For dependents under age 16, the deduction amount became ¥0 from FY2012 (income year 2011).

Therefore, the number of such dependents does not affect the calculation of income tax. (However, if the dependent under age 16 is disabled, the disability deduction still applies.)

However, for resident tax calculation, the number of dependents is used to determine whether the per capita levy or income levy is exempt, regardless of the amount of the dependent deduction.

In addition, some welfare services use the number of young dependents as a criterion for determining eligibility. Therefore, even dependents under age 16 must still be declared correctly.

If you file a final tax return, be sure to list them in the section ’Information on Spouse and Relatives’ on page 2 of the return.

I heard that if I make a hometown tax donation (furusato nozei), my taxes will be refunded. Is that true?

Answer

By making a donation to a local government such as a prefecture or municipality (that is, a furusato nozei donation), you may receive a donation deduction for income tax and resident tax purposes.

This does not mean that the full amount of the donation is simply refunded. Rather, your tax burden is reduced by filing the appropriate tax declaration.
For resident tax, there is a special deduction for furusato nozei donations, but there is a limit based on your tax amount.

Also, if you are exempt from tax, or if only the per capita levy applies to you, there is no tax amount available to reduce, so there will be no refund from making a furusato nozei donation.

If you file a final income tax return for a furusato nozei donation, be sure to fill in both:

• the ’Matters Related to Donation Deductions’ section on page 2 of the return, and
• the ’Donations to Prefectures and Municipalities (Eligible for Special Deduction)’ section under ’Matters Related to Resident Tax and Business Tax.’

For how donation deductions are calculated, please refer to the page on donation deductions.

About Donation (Charitable Contribution) Deductions (Japanese)

For information on furusato nozei, please also see the recommended information on furusato nozei.

 Furusato Nozei (Hometown Tax Donation) (Japanese)

Inquiries

Municipal Tax Division (Shimin-zei-ka, 市民税課): 082-420-0910
Location: 5F Main building

Please click here for any enquires by email.