New Documents for Exemption for Dependents on Japan Individual Income Tax

With respect to withholding at source for salary, to be paid on after January 1, 2016 or the year-end tax
adjustment, You are required to submit the following documents in order to apply exemption for Abroad Dependents.

1. Applying for a Tax Exemption for Dependents

If you have family supporting their life expense, you would be able to deduct some amount from your income on tax calculation. The new rule is for the exemption for dependents living abroad.

Under income tax laws and regulations, the new rule has come into force since October 2015. Accordingly you are required to submit or present “Documents concerning relatives” and “Documents concerning remittances” for the exemption for dependents of non-residents.

If the resident applies for an exemption for dependents, etc. with regard to his/her non-resident relatives at the time of tax return for 2016 and subsequent years, the resident is required to attach “Documents concerning
relatives” and “Documents concerning remittances” to the tax return forms or present such documents when
submitting the tax return forms, unless such documents have already been submitted or presented to the payer
of the salary.

Procedure Exemption applied for Necessary documents Timing of submission / presentation
Withholding at source for salary, etc. Exemption for dependents, spouses or the disabled Documents concerning relatives At the time of submitting the Application for Exemption for Dependents, etc.
The year-end adjustment for salary, etc. Exemption for dependents, spouses or the disabled Documents concerning remittances At the time of the year-end adjustment
Special Exemption for spouses Documents concerning relatives and documents concerning remittances At the time of submitting the Application for Special Exemption for Spouses

2. What are “Documents concerning relatives”?

2.1. Details for “Documents concerning relatives”

“Documents concerning relatives” refers to any of the documents listed in (1) and (2) below (Japanese
translation is also required) that proves that the non-resident relatives concerned are your relatives.

  1. A copy of the supplementary family register or any other document issued by the Japanese government or
    a local government as well as a copy of the non-resident relatives’ passport
  2. A document issued by a foreign government or a foreign local government (limited to the documents
    showing the name, date of birth and address or domicile of the non-resident relatives)

2.2. Practical Key Notes

Practically, you would note following points.

  • Documents issued by a foreign government or a foreign local government include a transcript of the
    family register, birth certificate and marriage certificate.
  • If a single document does not show all of the name, date of birth and address or domicile of the nonresident relatives or cannot prove that the non-resident relatives are your relatives, you are required to prove such matters by combining multiple documents.
  • The resident may apply for an exemption for dependents, etc. with regard to his/her relatives by
    consanguinity within the sixth degree, a spouse and relatives by affinity within the third degree.

3. What are “Documents concerning remittances”?

3.1. Details for “Documents concerning remittances”

“Documents concerning remittances” refer to the following documents (Japanese translation is also required),
which prove payments you made to non-resident relatives in the year for their living or education expenses

  1.  Documents issued by a financial institution that prove payments you made to non-resident relatives
    through exchange transactions of the financial institution or a copy of such documents; and
  2. Documents issued by a credit card company that prove that non-resident relatives have used a card issued
    by the credit card company for purchasing products or service and thereby have received or will receive
    from you the amount equivalent to the amount spent with the credit card or a copy of such document.

3.2. Practical Key Notes

  • Documents concerning remittances include the documents listed below.
    Please note that if you provide non-resident relatives with living expenses, etc. in cash through your
    acquaintance in which case a document concerning remittance does not exist, you can’t apply for an
    exemption for dependents, etc

    1. A copy of the foreign remittance request form
      It must be a copy of the foreign remittance request form for a remittance(s) made during the year.
    2. Credit card statement
      • A credit card statement means a statement of the credit card issued under contract between you
        and the credit card company for the use of credit card by a non-resident relative and the payment
        of the amount spent by you (so-called family card). In this case, the statement is treated as a
        document concerning remittance for the non-resident relative who is the holder of such family
        card.
      • Credit card statements are treated as documents concerning remittance for the year to which the
        credit card usage date belongs.
  • When applying for an exemption for dependents, etc. regarding two or more non-resident relatives, remittances need to be made to each of such relative. For example, if your spouse and child are non-resident relatives and you remit the entire amount of living expenses to your spouse, the documents relating to such remittance are treated as documents concerning remittance for the spouse but not for the child.
  • With respect to documents concerning remittances, you are required to submit or present all documents relating to the remittances made during the year in which an exemption for dependents, etc. is applied. However, if remittances, etc. are made to the same non-resident relative more than three times in a year, you are required to submit a statement describing certain matters and submit or present the documents concerning remittance for the first and last remittance made to the non-resident relative in the year and thereby may omit submitting or presenting documents concerning remittances for other remittances. In this case, you need to store the documents concerning remittances whose submission or presentation has been omitted.

4. AFTERWARD

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