Tax Withholding (源泉徴収) and Kojin Jigyo

If you have been working for some Japanese clients as a freelancer or on a contractual basis, you may have heard of the obligation for the company to deduct a certain amount for “Tax Withholding” (源泉徴収).

When it happens, do not worry, neither your Japanese client nor the government are trying to steal your money : this is only a pre-tax that you can later deduct from your revenue tax. If the amount you paid for this pre-tax is higher than the revenue tax, you will be able to claim the extra money back.

If you pay your taxes in Japan and that you work for your clients on a contractual/freelance basis and that you’re not incorporated (K.K or G.K), do not forget to add this line to your invoice, and make sure your name and address perfectly match the ones declared at your local city hall/tax office.

The amount of the tax is as follows (valid for 2013 fiscal year):

-10.21% for invoices under 1,000,000 yen

-20.21% for invoices above that amount

One thought on “Tax Withholding (源泉徴収) and Kojin Jigyo

  1. When you get your pension refunded, 20% of it is taken by the Japanese Government as tax. However, you are eligible to get this 20% back as well. The process described below is for both the pension and tax refund.

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