If you earn money as an employee or self-employed in Japan, you need to examine whether you should submit your final income tax return or not. We usually call a taxpayer such as an employee and self-employed an individual. Categories for taxpayers are mainly an individual and a corporation.
When you calculate your taxable income, you need to know its scope first. Before you identify your taxable income, you need to know your residential status classification because taxable income is defined by your residential status.
1. Classification for your residential status
If you have a domicile or owns a residence continuously for one year or more, you are classified as a resident.
Residents are classified as follows:
a. Residents other than non-permanent residents
b. Non-permanent residents
If you are not classified as a resident, you are a non-resident.
2. Taxable incomes of "Residents other than non-permanent residents", "Non-permanent residents" and "Non-residents"
Residents are classified as "residents other than non-permanent residents" or "Non-permanent residents".
1) Residents other than non-permanent residents
Residents other than non-permanent residents are obligated to pay the income tax for their whole income.
Whole income means your income all over the world.
2) Non-permanent residents
Non-permanent residents are residents of non Japanese nationality and the period during which you have owned your domicile or residence in Japan exceeds five years or more within the last ten years.
Non-permanent residents are obligated to pay income tax with respect to their (a) income other than foreign source income, (b) foreign source income paid in Japan and (c) foreign source income paid abroad and remitted to Japan from abroad. The amount "remitted to Japan from abroad" means, among the amount remitted and received by non-permanent residents from abroad to Japan each year, when you earned foreign source income in other countries.
Non-residents are obligated to pay the income tax for their income earned domestically.