I know Irish citizens get income tax exemption for the first 2 years in Japan, but does that include residence tax? I never had that on my payslip, and usually the pension etc is taken directly from there, and I never got any letters in the mail. But I got a letter in the mail today with payslips to pay for the next 6 months of municipal taxes, and I never got those before since arriving here in August last year. The tax treaty is here and it mentions local inhabitants tax, but I don’t know enough jargon to understand it: https://www.revenue.ie/en/tax-professionals/documents/double-taxation-treaties/j/japan.pdf
Is it possible that I am exempt?
3 comments
When I came to Japan, the US also had income tax exemption the first two years. Residence tax comes the second year, after you’ve been in Japan for a full year (you’re always paying for the previous year’s tax).
You’ve just received the residence tax bill for 2022. You didn’t get a bill in 2022 because you weren’t here in 2021.
Some employers don’t take residence tax from your paycheck. In that case, you’d get bills in the mail and be expected to pay them on your own. It sounds like this is the case for you.
AFAIK the two-year exemption for teachers / researchers (it’s not a general exemption for Irish citizens sadly!) is solely for income tax, and doesn’t exempt you from any other taxes, including residence tax. Same goes for pension, health insurance, etc.; although these things are levied based on your income level, they’re not considered an income tax per se, and not covered by the treaty.
As the other poster mentioned, residence taxes are paid a year in arrears – you’re always paying last year’s tax, which means you don’t pay anything in the first year that you live here. (Note that this can also land you with an unpleasant surprise when you leave, as depending on the timing of your departure, you may still have a year’s worth of residence taxes to pay off!)
I’ve been exempt from income tax, residence tax and pension for 3 years now.