The Final Tax Declaration as Residents

Residents:

Those who have a domicile in Japan and have resided continuously in Japan for one year or more.

Non-residents:

All individuals other than residents.
When the individual has an occupation overseas that typically requires them to reside continuously for more than one year, they are presumed to be non-residents immediately after the departure from Japan.

Practical application of presumption of domicile (basic circular) In order to make it more practical and uniformed judgments regarding the specific application of the provision for presuming the presence or absence of a domicile, unless the period of service outside of Japan for employees working outside of Japan is limited to less than one year in advance in contracts,  it is presumed that the person does not have a domicile in Japan.

Tax Declaration at the Time of Departure

Article 127. Where a resident is to make a departure from Japan during the year, and a return under the provisions of Article 120(1) (Income tax return) needs to be filed with regard to the amount of gross income, the amount of retirement income, and the amount of timber income of the resident for the period from January 1 of the year until the time of his/her departure, the resident must file a return stating the matters listed in the items of paragraph (1) of the said Article based on the circumstances as of the relevant time with the district director of the tax office by the time of the departure, ….

Definitions under Article 2, Paragraph 1 of the Income Tax Law

(xlii) departure: with regard to a resident, to cease to have a domicile or a residence in Japan without making a notification of tax administrator under the provisions of Article 117(2) (Tax administrators) of the Act on General Rules for National Taxes, and with regard to a nonresident, to cease to have a residence in Japan without making a notification of tax administrator under the said paragraph (with regard to a nonresident who does not have a residence but has a permanent establishment in Japan, this term means that such nonresident ceases to have a permanent establishment, and with regard to a nonresident who does not have a residence nor a permanent establishment in Japan, this term means that such nonresident discontinues the business prescribed in Article 161(1)(vi) (Domestic source income) that the nonresident conducts in Japan);

Cases Not Requiring Final Income Declaration According to Article 121 of the Income Tax Law

Article 121. Notwithstanding the provisions of paragraph (1) of the preceding Article, where a resident who has employment income for the year and whose salary, etc. prescribed in Article 28(1) (Employment income) (hereinafter referred to as a “salary, etc.” in this paragraph) to be received within the year is not more than 20,000,000 yen falls under any of the following items, the resident is not required to file a return under the provisions of paragraph (1) of the preceding Article with regard to the income tax related to the amount of taxable gross income and the amount of taxable timber income for the year; provided, however, that this shall not apply in cases specified by Cabinet Order, such as where the resident receives payment of consideration for providing his/her assets, such as real property for the business of the payer of the salary, etc. related to the employment income :

i. where the resident has received payment of a salary, etc. from one payer of salary, etc. and income tax has been withheld or is to be withheld pursuant to the provi-sions of Article 183 (Withholding liability for employment income) or Article 190 (Year-end adjustment) with regard to the whole of the said salary, etc., and if the sum of the amount of interest income, the amount of dividend income, the amount of real property income, the amount of business income, the amount of timber income, the amount of capital gains income, the amount of occasional income, and the amount of miscellaneous income (hereinafter referred to as the “amount of income other than employment income and retirement income” in this paragraph) is not more than 200,000 yen

Tax Agent/Administrator

Under Article 117 of the National Tax Agency Law (Tax Agent/Administrator), individuals who do not have a domicile or residence (excluding offices and business places) in the enforcement area of this law, or corporations without a head office or main office in the enforcement area, must appoint a tax agent to handle submissions of tax returns and other tax-related matters when necessary.
Appointing a tax agent subjects the individual to the regular tax declaration deadlines, not the deadlines applicable at the time of departure.

Tax Agent for Municipal Taxes under Article 300 of the Local Tax Law

Taxpayers of municipal taxes must appoint a tax agent to handle all tax-related matters if they do not have a domicile, residence, office, business place, or dormitory within the municipality. They must report this agent to the mayor or apply for approval to appoint an agent from outside the designated area who is convenient for handling such matters. Changing the tax agent is subject to similar regulations. However, if the taxpayer can prove to the mayor that appointing a tax agent is not necessary for the secure collection of municipal taxes, then appointing one is not required.

Year-End Adjustment at the Time of Departure

Article 190. With regard to a resident who has submitted an employment income earner’s declaration for dependency deduction, etc. and for whom the amount of salary, etc. that is determined to be paid during the year as prescribed in item (i) is not more than 20,000,000 yen, where the payer of salary, etc. via whom the resident has submitted the said declaration makes the last payment of salary, etc. for the year (excluding the case where the resident is expected to submit the said declaration to a payer other than the said payer thereafter by December 31 of the year), if the total amount of income tax set forth in the said item exceeds or falls below the amount of tax set forth in item (ii) as calculated based on the circumstances at the time of the last payment of salary, etc. for the year, the amount of excess must be appropriated to income tax to be withheld upon the last payment of salary, etc. for the year, and the amount of shortfall must be withheld upon the last payment of salary, etc. for the year and paid to the State by the tenth day of the month following the month in which the day of withholding falls:

Notification Related to Affiliation

Foreign nationals working with a work permit must submit a “Notification Related to Affiliation” to the Immigration Bureau upon resigning from their company. The resigned foreign national must fill out the prescribed form with their name, date of birth, gender, nationality, address, residence card number, the name and location of the resigned company, and the resignation date, and submit it to the Immigration Bureau.