There are a number of different kinds of taxes in Japan, and they are paid at the national, prefectural, and municipal levels in different forms. Some of the most relevant taxes to expats include:
Income Tax – This tax comes in two forms: a national tax, and “shinminzei” (resident tax) which refers to taxed income at the prefectural and municipal levels. It is unrelated to rented or purchased property.
Consumption Tax (VAT) – Current consumption tax is 5% on products and services. This is paid at the register although consumption tax is now included within the listed price of the item being purchased. There are additional taxes on alcohol, cigarettes, and gasoline – these taxes are also included within the price displayed at the point of purchase.
Property Tax – Paid at the municipal level and relates to the ownership of land and housing.
Vehicle Tax – There are several different kinds of taxes associated with owning a vehicle in Japan, as is outlined in the section “Buying a Vehicle” elsewhere in this guide. These taxes include an acquisition tax paid when purchasing a car, an annual tax paid based on the size of the engine, and an additional tax paid during car inspection.
