The first (natural) year you don’t have to pay residence taxes. Starting the second year you have to pay them (as it’s based on the income you made the previous year). It’s an extra +10% more or less, and it has nothing to do with being American
You mean residence tax I’m guessing? You enjoy not paying residence tax in your first year in Japan as it’s based on your income from the previous year. Naturally from the second year you will begin paying it. It also means when/if you decide to leave Japan you will owe tax. Nothing to do with being an American.
As others said, you don’t need to pay residence tax in your first year and I’m not sure if I’m remembering correctly as it’s been 10 years but in your first year I believe health insurance was cheaper too?
Yeah, also they may go up with your income or place of residence, especially the res tax. Also if you use the health insurance a lot of may go up the year after. It happened to me after having two eye surgeries in 2020,and noticing the cost going up in 2021.
Your tax rate is based on your previous years tax record, as you haven’t had a tax record in Japan the previous year, it is assumed that you earned nothing and therefore your tax rate for eveything is set to its lowest.
Taxes are based on the previous year’s income. So 1st year when your previous year’s income is 0, has lower taxes than 2nd year when you hopefully earned more than 0 in the 1st year.
The other comments only have part of it right. The first part, residence taxes, are paid starting in June of the following year they were incurred (Jan-Dec of the previous year).
The second part stems from the Japan-US tax treaty that exempted ALTs from paying income tax I believe for the first two years they were here. However, this exemption applies to a limited pool of people and I think it might have been removed the last time the treaty was updated (this never applied to me so I don’t know the details).
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The first (natural) year you don’t have to pay residence taxes. Starting the second year you have to pay them (as it’s based on the income you made the previous year). It’s an extra +10% more or less, and it has nothing to do with being American
You mean residence tax I’m guessing? You enjoy not paying residence tax in your first year in Japan as it’s based on your income from the previous year. Naturally from the second year you will begin paying it. It also means when/if you decide to leave Japan you will owe tax. Nothing to do with being an American.
As others said, you don’t need to pay residence tax in your first year and I’m not sure if I’m remembering correctly as it’s been 10 years but in your first year I believe health insurance was cheaper too?
Yeah, also they may go up with your income or place of residence, especially the res tax.
Also if you use the health insurance a lot of may go up the year after.
It happened to me after having two eye surgeries in 2020,and noticing the cost going up in 2021.
Your tax rate is based on your previous years tax record, as you haven’t had a tax record in Japan the previous year, it is assumed that you earned nothing and therefore your tax rate for eveything is set to its lowest.
Taxes are based on the previous year’s income. So 1st year when your previous year’s income is 0, has lower taxes than 2nd year when you hopefully earned more than 0 in the 1st year.
The other comments only have part of it right. The first part, residence taxes, are paid starting in June of the following year they were incurred (Jan-Dec of the previous year).
The second part stems from the Japan-US tax treaty that exempted ALTs from paying income tax I believe for the first two years they were here. However, this exemption applies to a limited pool of people and I think it might have been removed the last time the treaty was updated (this never applied to me so I don’t know the details).