The Taxes in Japan

The Singaporean Complaint.

If you are a working adult in Singapore, you will often heard about how our government is sucking our blood dry by implementing “high” taxation, GST, etc to take back the money that they gave us. I am not a pro-government not an anti-government Singaporean. However, I do know that we have a good government and we have one of the lowest taxation in the world.

Planning for the relocation to Japan has definitely further convinced me that Singapore has one of the smartest government in the world. My colleague whom had stayed in Japan for a number of years advised me to look at the taxes for a start.

The Crazy 50% Deduction.

One of the blog that I heavily depended on wrote that there are multiple taxes in Japan. As someone that has never thought of relocation to other country, this greatly surprises me. All along, I thought that it was the housing rent that I need to worry about when planning for budget. But how wrong I was.

In Singapore, I am paying about 5% for income tax, 5% for my own health insurance and 15% for my pension. That comes up to 20% of my income.

But things are different in Japan. Based on my estimated yearly income, I will need to pay 23% income tax, 10% health insurance, 4% Prefecture levy, 6% Residence tax and 9.15% for pension. This is a whopping 52.15% of my yearly income.

Singapore and Japan Double Tax Treaty

So what’s next? How can I reduce the income lost? This is when I read about the Double Tax Treaty that Japan had with Singapore. A quick check with our good friend – IRAS, brought me to this page. There is a double tax treaty between Japan and Singapore and if I am taxed in Singapore, I will not be taxed Japan (for income tax only). However this only applies if you reside in Japan for no more than 5 years.

Salary Options

With the tax consideration in place. It would then for me to find out if I can be paid in Singapore, so that I will not be subjected to the income tax in Japan. But this discussion of pay package can only take place early next year. Suffice to say, if I were to be taxed in Japan, a huge increment of my salary will need to take place.

So if you have read my entry till now and have any good advice, leave me a comments below. I would love to hear from you!

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