Tax

The JET Programme Canada takes no responsibility for the accuracy of the information contained herein, nor accepts responsibility for any financial loss incurred or any legal action taken against anyone (whether or not they are associated with the JET Programme) as a result of information contained in or omitted from this article.

Exempt From Canadian Income Tax

JET Programme participants are not necessarily exempt from tax obligations in their home countries. It is the responsibility of individual participants to clarify such obligations prior to their departure for Japan. Each participant is responsible for the payment of any obligatory home country taxes.

Generally speaking, income taxes in Canada are imposed on the basis of residency status as well as the source of income. Factual residents and deemed residents of Canada are subject to income tax on their world income. Non-residents of Canada are subject to income tax in Canada only on their Canadian income source. JET Programme participants employed by a local authority in Japan are considered factual residents of Canada and are required to report their world income by April 30, including income from the JET Programme on their Canada income tax returns. However, such participants are exempt from Canadian income tax on their employment income earned under the JET Programme in accordance with Article 18 of the Canada-Japan Tax Treaty. Income earned under the JET Programme is reported at line 104 of the general T1 return and a corresponding deduction claimed at line 256 (line numbers may be subject to change). In order to be eligible for the specific provisions, you must attach a letter to your tax return indicating that this income was received on the JET Programme as well as the Japanese Gensen choshu hyo (Statement of Earnings). This is similar to the Canadian T4 form, which shows income earned and income tax paid in Japan.

 

Canadian JET Programme participants are liable for Japanese income tax and will receive an adjusted gross salary to compensate for this taxation by their contracting organisation. In the case where the period of appointment is less than one year, JET participants may be required to pay taxes in their home country in accordance with tax treaties.

Canadian taxation information and forms can be accessed electronically by visiting the Canada Revenue Agency website.

Taxes In Japan (for JETs who departed from 2012 onwards)

It is important to obtain your Statement of Earnings from your contracting organisation. This statement can take the form of either: a Gensen choshu ni kakaru shotokuzei no nozei shomei negai or a Kyuryo shotoku no gensen choshu hyo (you will receive this either in December or January (in some cases it may be given in June or July).

Tax matters in Japan require very little paperwork. JET participants who are liable for income taxes will likely be liable for inhabitation taxes also. Inhabitation taxes are calculated based on your previous January to December income in Japan. Your contracting organisation will either deduct this tax monthly from your remuneration or you will receive a bill around June for the entire year. However, even when you are liable for taxes for your first year, inhabitation taxes are generally not required in the calendar year in which you arrive. So, if you arrive in July 2012, you will have inhabitation taxed due in 2013.

For JET participants who have taxes in Japan imposed on them, your JET income us before income and inhabitation taxes have been paid.

Taxes In Japan (for JETs who departed prior to 2012)

If your gross income is more than ¥300,000 per month and no tax deductions are made, ask your supervisor to explain your pay slip to you. You might be expected to pay a lump sum directly to Japanese tax officials later in the year.

If paying tax in Japan, it is important to obtain a breakdown of such payments (Statement of Earnings) from your contracting organisation. This statement can take the form of either: a Gensen choshu ni kakaru shotokuzei no nozei shomei negai or a Kyuryo shotoku no gensen choshu hyo. If your visa type and nationality exempts you from paying Japanese taxes, the statement may also take the form of a Kyuyo shiharai hokokusho.

Tax matters in Japan require very little paperwork. You should also be sure to keep your Gensen choshu hyo or Statement of Earnings (a small slip of paper which will appear in your December pay packet; see example in the appendix). JET participants who have to file tax returns in their home country need this, as do all reappointed JET participants who apply for an extension on their visa. You will receive this slip of paper from your contracting organisation around the beginning or end of a calendar year (December or January). The Gensen choshu hyo details your income, tax you pay and how much you contribute to Social Insurance and Pension.