Taxation in Japan is based upon a national and one`s area of residence and administered by the National Tax Agency. Taxes are paid on income, property and consumption on the national, prefectural and municipal levels. If you are coming to Japan for work, for a long-term period and have an income in Japan, then it would be better for you to know about the most relevant types of taxes below, which are paid by individuals:
 Income Tax
This tax is paid annually (every month) by individuals on the national, prefectural and municipal levels, which is also known as "resident tax". The amount is calculated based on the net income of the individual person, i.e. on income earned during a calendar year. For tax purposes, people living in Japan are classified into 3 categories below:
*Non-Resident
An individual who has stayed in Japan for less than 1 year and does not have his primary base of living in Japan. Non-residents pay taxes only on income from sources in Japan, but not on income from abroad.
*Non-Permanent Resident
An individual who has stayed in Japan for less than 5 years, but has no intention of living in Japan permanently. Non-permanent residents pay taxes on all income except on income from abroad that does not get sent to Japan.
*Permanent Resident
An individual who has stayed in Japan for at least 5 years or has the intention of staying in Japan permanently. Permanent residents pay taxes on all income from Japan and abroad.
There are cases when a foreigner working in Japan has no income (salary/wage paid in his/her own country). In that case, there will be no income tax for such foreigners. As you might already know, income tax in Japan is calculated based on the previous year`s earnings.

 Residence Tax
Another, tax we pay is a residence tax, i.e. the municipal or city tax. All residents of Japan, including foreigners, are required to pay residence tax and it is calculated based on a certain % of your annual income. The amount of residence tax to be paid includes prefectural and municipal residence tax, which is determined by the amount of income received between January and December of the previous year, and the number of dependents you have. Therefore, foreigners will not be charged for it during the first year in Japan.
Also, the residence tax is charged based on the city where you live, not the place where you work.
If, on January 1 2016, you had lived in Japan continuously for one year or more, or if your occupation requires you to live in Japan for one year or more, then you are a resident and require to pay residence tax this year, 2017.
Even if you were living in another city in Japan on January 1st and have recently moved to Nagoya, then your previous municipal office will issue a bill to your Nagoya address. Alternatively, if you were living in Nagoya on January 1st but have recently moved to another city in Japan, then in the same way the Nagoya Municipal Tax Office will issue you a bill to your new address.
As mentioned above, if you are new to Japan this year, you won’t get a bill this time and you can breathe a sigh of relief until next June.

Residence tax has one flat rate of 10% (9.4% for Nagoya City) and it goes to the local governments and is divided between the city and prefecture. All the key numbers are on your income tax withholding statement which you received from your place of employment in January.
To make it simple (well, taxes are never simple),
Residence Tax = Your total taxable income x 10%.

Like Japanese employees either your employer will deduct tax payments from your salary each month from June to May and then pays the tax to the Ward office for you, or you will receive payment slips in the mail directly from the Nagoya Municipal Tax Office. The payment slips are issued in June, August, October and January. If you fail to pay your taxes by the deadline, a delinquency charge will be added.
Residence tax can be paid at a bank, a post office, convenience store, ward office / city hall, or directly to at the issuing Municipal Tax Office. If you move out of Nagoya or permanently leave Japan, you must pay any remaining balance you have, or appoint a proxy to pay the remaining balance to your Municipal Tax Office.

However, there are individuals without tax obligations.
· Individuals who receive welfare protection.
· Individuals with disabilities, minors (under 20 years old), widows or widows who had income of less than 1.25 million yen in the previous year.
· Individuals whose total income amount was less than or equal to the amount determined by the municipality (*)
and etc.

(*) Total income amount to decide taxation / tax exemption of resident tax varies according to municipality.

There are many foreigners who come to Japan to work based on the contracts between their home country employer and a Japanese company. Thus, while their stay in Japan there will be no income, as they are paid by the home country employer directly to their account. Not only the first year in Japan, but also the consecutive years of their stay in Japan, there will be neither income tax, nor residence tax, according to Japanese legislation.
Procedures are done at the ward office/city hall and local tax offices, and because there are usually no English-speaking staff, we do recommend to do the procedures by the help of our multilingual NUKUMORI team members!!!