Japan Tax Bulletin
Tax Reductions for Residents
May 2024
In accordance with the 2024 Japan Tax Reform, fixed amountof tax credit against National Income Tax and Local Inhabitant
Tax will be implemented. This tax credit is a one-time deal andapplicable to 2024 National Income Tax and 2024/25 Local
Inhabitant Tax payable from June 2024.
1.

Who is eligible?

An individual taxpayer must be a tax resident of Japan withtotal income in 2024 less than JPY 18,050,000 (JPY 18,050,000
after employment income deduction).
2.

How much is the reduction credit?

Tax credit is JPY 30,000 for National Income Tax and JPY
10,000 for Local Inhabitant Tax. Taxpayers with spouse anddependents whose annual income is less than JPY 480,000 are
eligible for additional reduction credit. Additional reduction is
JPY 30,000 for National Income Tax and JPY 10,000 for Local
Inhabitant Tax per eligible spouse and dependents. In casespouse or dependent’s sole source of income is employment
income, tax reduction credit is allowed if 2024 gross earnings isless than JPY 1,030,000.
3.

How does the tax reduction credit apply?

Tax reduction credit is applies based on the income type ofindividual taxpayers.

20,000,000, tax reduction credit applies income tax
withholding will be reduced as if they are eligible for thereduction starting from June 2024 monthly payroll. Since
they are not subject to annual year-end payroll adjustment,
final income tax adjustment will be done by filing ofannual income tax return.
 Additional tax reduction credit may be available for eligible
spouse and dependents based on their status at the time ofyear-end tax adjustment.
(2) National pension recipients
 Tax reduction credit applies by reducing income tax
withholdings from monthly old-age pension pay-out
starting from June 2024. If reduction amount is not fully
used, unused balance will be carried forward to thefollowing month.
(3) Taxpayers with business income, real estate income or other typeof income
 For taxpayers with business income, real estate income orother type of income, tax reduction credit apply throughthe filing of annual individual income tax return. For thoserequired to make pre-payment of estimated tax,
adjustment will be made to their first estimated tax
payment calculated by the tax office.

(1) Employment income earners
 For those who are employed as of 1 June 2024 and are paid
earnings through payroll processed in Japan, tax reduction
credit applies in the form of reduction in income tax
withholding in June 2024 payroll. If reduction credit is
not fully used, unused balance will be carried forward tothe next monthly payroll.

Source: National Tax Agency
https://www.nta.go.jp/users/gensen/teigakugenzei/inde
x.htm

 For those who started employment after 2 June 2024, tax
reduction credit will apply in the form of year-end tax
adjustment processed together with December 2024payroll.
 For those who are employed as of 1 June 2024 and are paid
earnings through payroll processed in Japan but whose
annual employment earnings is expected to exceed JPY© Grant Thornton Taiyo Tax Corporation. All rights reserved. “Grant Thornton” refers to the brand under which the Grant Thornton member firms provide assurance, tax and advisory services to their clients
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