Japan's income tax return (kakutei shinkoku)

Japan's income tax return (kakutei shinkoku)

Kakutei shinkoku — the final income tax return — is filed with the National Tax Agency (NTA) by individuals who need to settle their annual income tax liability. For most employed workers in Japan, year-end adjustment (nenmatsu chosei) by the employer handles the obligation entirely, meaning many residents never file a return at all. Those outside that category, or who have additional income or deductions to claim, must file during the designated period in mid-February to mid-March. A tax professional familiar with Japanese tax rules can clarify which category you fall into.

How withholding works for employed workers

Japan operates an extensive employer-based withholding (gensen choshu) system. Each month, employers withhold estimated income tax from salaries and remit it to the tax office on the employee's behalf.

At year-end, most employers perform nenmatsu chosei — an annual settlement that reconciles the total tax withheld against the employee's actual liability for the year. This process accounts for:

• Changes in dependants (haiyusha)
• Life insurance premium deductions
• Earthquake insurance deductions
• Social insurance premium deductions

For employees with a single employer, no other income, and no special deductions to claim beyond what nenmatsu chosei covers, the employer's adjustment eliminates the need to file a return personally. This is why a large share of Japan's salaried workforce does not interact directly with the NTA's filing system.

Who must file a kakutei shinkoku

Despite the prevalence of employer withholding, several categories of individuals are required to file directly:

• Self-employed individuals (kojin jigyo) and freelancers with business income
• Employees whose total salary income from all sources exceeds 20 million yen
• Employees who received salary from two or more employers simultaneously
• Individuals with income from real estate, investments (dividends, capital gains from unlisted shares), or miscellaneous sources above thresholds set by the NTA
• Those with foreign-sourced income
• Individuals who became non-resident for part of the year

Additionally, filing is voluntary but advantageous when:

• You wish to claim a medical expense deduction (iryo-hi koyo) above the threshold
• You made qualifying charitable donations (furusato nozei or other designated donations) and want the donation tax credit
• You are claiming a home loan deduction (jutaku loan koyo) for the first year of a mortgage — after the first year, nenmatsu chosei can handle this

The filing window: mid-February to mid-March

The kakutei shinkoku period for the previous tax year runs from mid-February to mid-March each year. The NTA publishes the precise opening and closing dates on its website annually — the general window is consistent, but confirm the exact dates at nta.go.jp.

Notable points about the filing window:

• Returns for a refund (kanpu shinkoku) can be filed from 1 January of the following year, before the general window opens
• If a deadline falls on a weekend or public holiday, it shifts to the next business day
• Late filing after the mid-March deadline does not prevent submission but may incur a delinquency surcharge (mukan kashazei) if a balance is owed

The tax year in Japan follows the calendar year: 1 January to 31 December.

e-Tax: filing online through the NTA portal

The NTA operates e-Tax (etax.nta.go.jp), the official online filing system for income tax returns, corporate tax returns, and other national tax forms.

Individual filers have two main options:

e-Tax pre-populates some fields when linked to My Number and draws on payslip data submitted by employers. The system also guides filers through common deduction claims and performs basic consistency checks. Completed returns are submitted electronically; filers receive an acknowledgement.

Paper returns remain available and can be submitted at local tax offices (zeimusho) or by post.

Key documents to prepare

Whether filing electronically or on paper, gather the following before you begin:

• Gensen choshu hyo (withholding tax statement) from your employer — typically issued in January
• Records of any other income (rental agreements, investment account statements)
• Receipts for deductible expenses (medical receipts, donation certificates, insurance premium notices)
• My Number (individual number) for all household members claimed as dependants

Where to get help

For official guidance, forms, and e-Tax access, visit the National Tax Agency at nta.go.jp. To find a qualified tax professional (zeirishi) in Japan, visit the Japan tax professional directory.

Sources

• National Tax Agency (Kokuzei-cho): nta.go.jp