【General】
Among residents, any individual of non Japanese nationality having domicile or residence in Japan for an aggregate period of five years or less within the last ten years (after April 1, 2006) is defined as “a non-permanent resident” (Law 2-1).
An expatriate who is a non-permanent resident is subject to tax on Japanese-source income and foreign-source income which is paid in Japan or remitted to Japan (Law7-1).
Japanese-source income is calculated by the following formula (Income other than Japanese-source income is treated as foreign-source income)(R161-28).
The amount of salary for the year × (365days – (days spent as home leave and business trips abroad)) / (365days – days spent as home leave)
【Non-taxable benefits】
1. Rent feeThe difference between the rent fee paid by the employer to landlord and the rent fee paid by the director or the employee to the employer is non-taxable, if the director or the employee pays at least the amount of rent which is calculated by the following formula (R36-40)
(a)In the case of rent fee paid for a director, 50% of the actual payment made by the employer to the landlord or the amount calculated by the following formula, whichever is greater, is non-taxable.
(Tax base for fixed asset tax on the housing for the year × 12% + tax base for the fixed asset tax on the land used for the housing for the year × 6% ) × 1/12
Where the housing is of non-timber construction, the above 12% is changed to 10%.Where the space of the housing is 132㎡ or less the following formula is applied (R36-41).
(Tax base for fixed asset tax on the housing for the year × 0.2% + 12yen × total space of the housing (㎡)) / 3.3㎡ + tax base for fixed asset tax on the land used for the housing for the year × 0.22%
Where the housing is of non-timber construction, the above 132㎡ is changed to99㎡.
(b)In the case of rent fee paid for an employee the amount calculated by the following formula is non-taxable.
Tax base for fixed asset tax on the housing for the year × 0.2% + 12yen × total space of the housing (㎡)) / 3.3㎡ + tax base for fixed asset tax on the land used for the housing for the year × 0.22%In the practice administration, the amount of 5% to 10% of the actual rent fee is deemed to be the amount which is calculated by the above formula.
2. Home leave expenses3. Business trip expenses4. Japanese language lessons5. Economic benefits for the school tuition fees, where the employer contributes to qualified schools such as the American School.6. Expenses for commuting up to 100,000yen, paid by the employer
【Taxable economic benefits】The following are the main items of taxable economic benefits:1. Expenses for utilities2. Expenses for furnitures3. Expenses for maid service4. Dues for private clubs
