Japan Tax Season: A Complete Guide to Filing Your Kakutei Shinkoku

Every year between mid-February and mid-March, residents in Japan undergo the tax season. For expats, determining whether you need to file a tax return (Kakutei Shinkoku - 確定申告) or if your company handles everything can be confusing. This guide covers who must file, what documents to prepare, key deadlines, and the deductions most worth claiming.

Nenmatsu Chosei vs. Kakutei Shinkoku

Most salaried employees in Japan do not need to file a personal tax return. Instead, their employer runs a Year-End Tax Adjustment (Nenmatsu Chosei - 年末調整) in December, recalculating taxes based on deductions submitted (like life insurance, spouse, dependent, or home loan deductions). If you have a single employer and no significant side income, Nenmatsu Chosei settles your tax for the year — you do nothing in February.

However, you MUST file a Kakutei Shinkoku if you meet any of the following criteria:

• Your total annual salary income exceeds ¥20,000,000.
• You have side income (e.g. freelance, dividend, rental income) exceeding ¥200,000.
• You had more than one employer during the year and secondary income exceeded ¥200,000.
• You left Japan before the year-end adjustment was processed (you must file by a representative, or your employer files on your behalf as a non-resident).
• You are claiming the Mortgage Tax Credit (jutaku loan kojo) in your first year of home ownership.
• You made Furusato Nozei donations to more than 6 municipalities (and did not use the One-Stop Exception), or otherwise need to claim medical expenses deduction.

Who Needs to File? (Quick Check)

• Single employer, no side income > ¥200,000, no medical/mortgage claims: No need to file. Nenmatsu Chosei handles it.
• You want a refund on medical expenses or deductions your employer didn't process: File voluntarily — even if not required.
• Freelancer, sole proprietor, or gig worker (Uber, freelance writing, etc.): Must file every year.
• High earner (salary > ¥20M): Must file.
• Left Japan mid-year: Must file via a tax representative, or your final salary is subject to 20.42% withholding as a non-resident.

A frequently misunderstood nuance: the ¥200,000 side-income threshold applies to net income (revenue minus deductible expenses), not gross revenue. If you earned ¥250,000 from freelance work but had ¥80,000 in deductible business expenses (software subscriptions, home office, transport), your net side income is ¥170,000 — below the threshold, and you may not be required to file. However, the deduction rules differ between national income tax and local residence tax, and some municipalities apply a stricter ¥200,000 gross-revenue trigger. When in doubt, file — the downside of filing unnecessarily is minimal paperwork; the downside of skipping a required filing is penalties.

What Documents Do You Need?

Before you start, gather the following. Bilingual labels are shown in parentheses — most of these appear on the e-Tax system exactly this way:

• Withholding Slip (Gensen Choshu Hyo - 源泉徴収票): Issued by your employer in early January. Shows your gross salary, tax withheld, and social insurance paid.
• Documents for Deductions (Kojo - 控除): Life insurance premium receipts, earthquake insurance receipts, medical bills (with receipts), Furusato Nozei donation certificates, iDeCo contribution statements, small-business mutual aid (kosei kumiai) receipts.
• My Number Card or Notification Card: Required to authenticate on e-Tax. If you have a My Number card with an electronic signature PIN, you can file from your phone.
• Bank account info for refund (if applicable): Refunds are usually wired within 1–2 months.
• Spouse's and dependents' info: ID numbers, income figures (for spouse deduction calculations).

Freelancers and sole proprietors need additional documentation: a blue return (Aoiro Shinkoku - 青色申告) requires a double-entry ledger or accounting software export, plus the blue return approval application filed by March 15 of the previous tax year. White return (white-colored) filers can use simpler bookkeeping but lose access to special deductions like the ¥650,000 blue return special deduction. If you earn any freelance income at all, registering as a blue return filer from your first year is almost always worth the extra bookkeeping effort.

Important Deadlines

The Kakutei Shinkoku window opens every year on February 16 (or the next business day) and closes on March 15. Missing the deadline means automatic penalties plus interest on any tax owed. If you expect a refund, you can file up to 5 years retroactively (the statute of limitations).

• February 16 – March 15: Standard Kakutei Shinkoku filing window for the previous calendar year.
• No extension: Unlike the US or UK, Japan does not offer an automatic extension. If you cannot meet March 15, you must file an estimated return and amend later.
• Refund claims: Can be filed starting January 4 — useful if you expect money back (e.g. medical deduction).

The penalty for late filing is twopart. First, an estimated tax assessment (kashi sareru) is issued based on available information, which is often higher than your actual liability because it does not account for deductions you would have claimed. Second, an additional tax (karyo-zei) of up to 15% of the underpaid amount is added, plus daily interest at 7.3% annualized (the nozehi rate). Even one month late can add thousands of yen in penalties on a modest tax bill. If you realize you missed the deadline, file immediately — voluntary filing before the tax office contacts you reduces the penalty substantially.

Common Deductions for Expats

Even if you are not required to file, you may WANT to file a Kakutei Shinkoku voluntarily to claim refunds. Deductions that cannot be processed during Nenmatsu Chosei — or that you simply forgot to submit in December — include:

• Medical Expenses Deduction (Iryohi Kojo - 医療費控除): Reclaim taxes if your family's annual medical payments exceeded ¥100,000 (or 5% of your income if lower). Cap is ¥2M for general medical, ¥10M for high-cost medical care (cosmetic surgery excluded). Receipts or the simplified 'medical expenses deduction set' from your insurance society are accepted.
• First-Year Mortgage Credit (Jutaku Kashitsuke Kin Kojo): In your first year of home ownership in Japan, you must file a Kakutei Shinkoku to claim the mortgage tax credit (up to ~¥5M over 13 years). Subsequent years are handled at work via Nenmatsu Chosei.
• Furusato Nozei: If you did not use the One-Stop system, or donated to more than 5 municipalities, you must file a tax return to deduct donations (effectively giving you your money back minus the ¥2,000 burden).
• iDeCo Contributions: All iDeCo pension contributions are fully deductible. If your employer didn't process them in Nenmatsu Chosei, claim them here.
• Spouse Deduction (Haigusha Kojo): If your spouse earns ¥2.01M or less, you may qualify for a deduction of up to ¥380,000. The exact amount depends on your own income.

Housing Deduction and Miscellaneous Deductions

• Housing Deduction (Jutaku Kyuyo - 住宅控除): Rent is not deductible in Japan. However, mortgage interest, property tax, and certain home improvement expenses for a primary residence can be deducted under specific schemes.
• Dependent Deduction (Fuyo Kojo): ¥380,000 per dependent (general), ¥630,000 for dependents aged 16–18, ¥630,000 for dependents aged 19–22 (the 'Special Dependent Deduction' for college students). Only relatives living in Japan with a My Number can be claimed.
• Disaster Loss Deduction (Zuishitsugai Kojo): If your home or property was damaged by a typhoon, earthquake, or fire, you can deduct the unreimbursed loss (minus ¥50,000). Requires documentation from the municipal government.

How to File: Step by Step

1. Go to the NTA e-Tax portal (https://keisan.nta.go.jp/) — English UI is available.
2. Create an ID, or log in with your My Number card + PIN if you have one.
3. Enter your withholding slip numbers — most fields auto-populate from the QR code.
4. Add deductions one at a time (medical, mortgage, Furusato Nozei, iDeCo, etc.).
5. Submit. If you owe additional tax, pay by bank transfer, credit card, or at a convenience store.

If you prefer in-person help, every tax office (Zeimusho) offers free consultation during filing season. Bring your documents and a Japanese-speaking friend if possible — wait times can exceed 2 hours in mid-March.

Estimated Tax Payments (Kariharai) for Freelancers

If you are a freelancer or sole proprietor, you are generally required to make estimated tax payments (Kariharai Zeikin - 仮払税金) twice a year based on your previous year's tax liability. The first installment (July) and second installment (November) are pre-payments toward your final Kakutei Shinkoku in the following March. If you underpay significantly, an interest charge is added at filing time.

• First estimated payment (第1期): Due July 1–31, based on your prior-year final tax.
• Second estimated payment (第2期): Due November 1–30, same basis.
• Exemption: If your prior-year tax was ¥150,000 or less, no estimated payments are required.

Freelancers whose income is growing should set aside roughly 20–25% of gross revenue each month to cover income tax, residence tax, and estimated payments. A common mistake is treating the full invoice amount as spendable income — after deductions, taxes, and the 10% consumption tax (if registered), take-home can be 60–70% of gross.

Leaving Japan Mid-Year: Tax Representative

If you leave Japan permanently before the Kakutei Shinkoku period, you must appoint a Tax Representative (Nouzei Kanrinin - 納税管理人) — a person residing in Japan who handles your tax filing and any refund collection on your behalf. This is also the mechanism for reclaiming the 20.42% withholding on your pension lump-sum refund. The representative does not need to be a tax professional; a trusted friend or colleague with a Japanese address will suffice, but they bear legal responsibility for the filing.

Without a Tax Representative, any tax matters requiring follow-up after your departure — including refund collection — cannot be processed. Many expats lose tens of thousands of yen in pension refund tax withholding simply because they left Japan without designating one.

Estimate Before You File

Before starting your return, run your numbers through our Income Tax Calculator to see what your taxable income, deductions, and final tax liability should look like for the year. This is especially useful for expats who have side income or mortgage deductions, since the gap between Nenmatsu Chosei withholding and actual liability often surfaces as an unexpected March bill.