Income Tax


There are two kinds of income tax in Japan:

  1. National Income Tax - charged at a progressive rate up to 45% (45.945% including the 2.1% surcharge for the Special Income Tax for Reconstruction).
  2. Residence Tax - charged at a flat 10%

Both of these taxes are applied to taxable income, which is total income after applying various income deductions. Tax deductions to the final amount of tax due are also available.

Aggregate vs Separate Taxation

In general, income is aggregated together and taxed as a single sum (総合課税, sougou kazei), however some income can be taxed separately at pre-determined rates (分離課税, bunri kazei). For example, income from dividends when taxed separately are taxed at a rate of 15.315% for National, and 5% for Residence taxes, instead of the rates listed above.

The total amount of income for aggregate taxation is calculated annually in the end of year tax adjustment or via a tax return.

Separately-taxed income can be automatically withheld at source (源泉分離課税, gensen bunri kazei), for example tax on dividends in a tax withholding account, or declared on the tax return (申告分離課税, shinkoku bunri kazei). For some income eligible for separate taxation, it is possible to choose aggregate or separate taxation. Which one is more beneficial depends on individual circumstances. See the Types of Income and Taxation Methods, National Tax Agency (PDF) (part of the 2023 Income Tax and Special Income Tax for Reconstruction Guide) for a complete list.

Available Deductions

There are two kinds of deductions:

  1. Income deductions, which reduce the amount of income that is taxable.
  2. Tax deductions, which directly reduce the amount of tax due.
Name Japanese Name Claimable via Tax return Claimable via EOY tax adjustment
Income Deductions
Basic Deduction 基礎控除 Yes Yes
Spouse Deduction 配偶者控除 Yes Yes
Dependent Deduction 扶養控除 Yes Yes
Life Insurance Deduction 生命保険料控除 Yes Yes
Earthquake Insurance Deduction 地震保険料控除 Yes Yes
Small Business Mutual-Aid Etc. Deduction - includes iDeCo 小規模企業共済等掛金控除 Yes Yes
Social Insurance Deduction 社会保険料控除 Yes Yes
Disability Deduction 障害者控除 Yes Yes
Single-Parent Deduction ひとり親控除 Yes Yes
Widow and Female Divorcee Deduction 寡婦控除 Yes Yes
Working Student Deduction 勤労学生控除 Yes Yes
Medical Expenses Deduction 医療費控除 Yes No
Miscellaneous Losses Deduction 雑損控除 Yes No
Donation Deduction - includes Furusato Nozei 寄附金控除 Yes No[1]
Tax Deductions
Dividend Deduction 配当控除 Yes No
Home Loan Deduction 住宅借入金等特別控除 Yes From the 2nd year
Special Donation Deduction[2] 政党等寄附金等特別控除[3] Yes No
Anti-earthquake Home Improvement Deduction 住宅耐震改修特別控除 Yes No
Certified Home Improvement Deduction 住宅特定改修特別税額控除 Yes No
Building a Home Deduction 認定住宅等新築等特別税額控除 Yes No
Foreign Tax Deduction 外国税額控除 Yes No

See Also


  1. Furusato Nozei donations can be handled without a tax return under certain conditions, see Furusato Nozei for details.
  2. There are three types: Donations to political parties, donations to certified NPOs, donations to public interest corporations.
  3. 政党等寄附金特別控除・認定NPO法人等寄附金特別控除・公益社団法人等寄附金特別控除