Ward office Tax

[yd_tokyo]

Hi,

I already read all the messages in this forum regarding ward office tax (Local Tax OR Residence tax).

I am family person with 2 kids.

Do anybody know how much other ward offices in Tokyo charge the Residence tax in terms of percentage or against 1M salary per month benchmark?

I am living in Minato-ku with above salary range. This is the same salary range last year too. I got the ward office tax notice of 52000 yen per month.

I want to check how much other ward offices like Koto-ku, Chiyoda-ku, Edogawa-ku charge it? Is it really worthwhile in terms of tax difference to move residence other ward office?

Any suggestion, KB on this will be highly appreciated.

Thankx

YD

[bezelye]

The local tax rate is the same for anywhere in Japan. You can not save tax by moving houses..

[Dinocracy]

Originally Posted by bezelye

The local tax rate is the same for anywhere in Japan. You can not save tax by moving houses..

Each area in Japan has its own way of calculating ward tax. This is a calculation based on income so different regions will have different charges for the local ward tax.

For the original poster, best to go to the Minato-ku ward office and ask if they have a list that outlines what each area in Tokyo charges.

[Brown Recluse]

Originally Posted by yd_tokyo

Do anybody know how much other ward offices in Tokyo charge the Residence tax in terms of percentage or against 1M salary per month benchmark?

I am living in Minato-ku with above salary range. This is the same salary range last year too. I got the ward office tax notice of 52000 yen per month.

I want to check how much other ward offices like Koto-ku, Chiyoda-ku, Edogawa-ku charge it? Is it really worthwhile in terms of tax difference to move residence other ward office?

The simple answer to your question is no. It does not matter which ward in Tokyo that you live in - your taxes due will be the same. I have not found anything in English explaining why, but if you can read Japanese, check out this page:
http://www.city.tokyo-nakano.lg.jp/013/d01600010.html

Basically, everyone in Tokyo-to pays 2% (3% if you make over 7m yen a year) at the district level plus a "special ward resident tax" of 8% (3% if you make up to 2m a year, and 10% if you make over 7m a year). All in, everyone living in the 23 wards of Tokyo pays between 5% and 13% depending on your income and other factors.

However, if you move outside the 23 wards (Tama, Hachioji, etc) into another city within Tokyo district, you tax rate will be lower. I am not sure how much lower, but you could check with individual city tax offices to find out more.

[Brown Recluse]

Here is the official explanation of the 5%, 10%, 13% local tax structure from the Tokyo Metro Govt Tax Office web site Q&A section:

http://www.tax.metro.tokyo.jp/shitsu...index_a.htm#a4

It looks like the local tax structure was just changed this year.

[bezelye]

Local tax rates used to vary to municipalities in some extent but now the same calculation table is applied to all. The rates for Tokyo's 23-ku looks higher because it integrate prefectural and city taxes into ward tax. If you move out of 23-ku, the total local tax you pay to prefecture and city (but city is the collector of both taxes) will be the same as the ward tax.
Please refer to the URL below for the historical calculation table. http://www2s.biglobe.ne.jp/~y-murase/tax/kojyuminn.htms
As it is mentioned above, the local tax rate will change from 2006. The change is to adjust the allocation of taxes to the state and local governments so your tax amount will not change in total (Kokuzei + Chihozei).

[yd_tokyo]

Thank you very much for the reply and sharing some knowledge on this.

My project manager has higher annual income (15M approx per year) than me + he has only 2 dependents as compared to 4 dependets to me. He lives in Narima-ku. His ward office tax is around 44000 a month as compared to my 53000 per month with approx 12M annual salary and 4 dependants. Only thing I live in Minato-ku.

Bottomline I want to say that the resident tax is not equally calaculated in all 23Ku offices.

I think, Minato-ku do offer more as comapared to other ward office such as free medical and immunization for child up to 6 years. Not sure whether other ward office offer similar things or not.

..more on that I come to know from this forum that its going to change, that make more nervous and thinking seriosuly whether to move to Koto-ku or edogawa-ku.

[Brown Recluse]

Originally Posted by yd_tokyo

My project manager has higher annual income (15M approx per year) than me + he has only 2 dependents as compared to 4 dependets to me. He lives in Narima-ku. His ward office tax is around 44000 a month as compared to my 53000 per month with approx 12M annual salary and 4 dependants. Only thing I live in Minato-ku.

Bottomline I want to say that the resident tax is not equally calaculated in all 23Ku offices.

YD - Have you checked to make sure that both of you are taking the same deductions? Maybe he took larger deductions for medical expenses, disability, and/or charitable giving, which might significantly reduce his taxable earned income after deductions. I am also not sure if wards differ in terms of the amounts allowed for certain deductions (in your case, children) - I haven't been able to find much on that subject on the web.

In addition, there could be a couple of other things going on: (1) your company's human resources department may be withholding 20% from your income (as opposed to 13% for him) depending on your residency status; (2) did you or he recently - within the past year - change jobs or companies? Either of these factors could have a large impact on your local taxable amount.

Based on everything that I have read and the people that I have talked to, there should not be any difference due to the ward that you are living in. Cheers.

[bezelye]

Yes. There are several elements to decide ward tax other than number of dependents, revenue amounts.
I am a tax specialist working for foreign companies based in Japan for more than 5 years. If you have doubt about your ward tax amounts, I can check if it is correct for you. I just want to help as many of my clients have difficulties to understand tax system here (especially local taxes as they have different from the state tax).

[wtf]

Originally Posted by bezelye

Local tax rates used to vary to municipalities in some extent but now the same calculation table is applied to all. The rates for Tokyo's 23-ku looks higher because it integrate prefectural and city taxes into ward tax. If you move out of 23-ku, the total local tax you pay to prefecture and city (but city is the collector of both taxes) will be the same as the ward tax.
Please refer to the URL below for the historical calculation table. http://www2s.biglobe.ne.jp/~y-murase/tax/kojyuminn.htms
As it is mentioned above, the local tax rate will change from 2006. The change is to adjust the allocation of taxes to the state and local governments so your tax amount will not change in total (Kokuzei + Chihozei).

hi bezelye,

when you say that the local tax rate is going to change from 2006, do you know how much the new rate will be?

i'm currently contemplating moving to tokyo for work. having a hard time estimating taxes. i have been assuming a flat 25% on income (after rental), and this 25% includes social contributions (the 3 elements - national pension, employee pension and employee health insurance), national tax (i.e. income tax) and local tax. Can someone kindly tell me if i am being ridiculous and under-estimating my taxes? (the salary offered to me will not be very high)

[calpispatrick]

I am also very interested in your comment that "Local tax rates used to vary to municipalities in some extent but now the same " - I have heard that local taxes in some parts of Kanagawa (Kamakura and Zushi) are high - is that true and does anybody have a general idea how much more expensive than 23-ku this might be? Thank you!

[bezelye]

Local tax in Kanagawa is high - it is true for corporations but not for individuals.
From this year single rate of 10% is applied to the income you earn (payment will be next year) anywhere in Japan.