For those in employment or business in Japan, the good news is that if you too send money from Japan to relatives living overseas then you may well be able to use these remittances to reduce your tax bill. This is a high level summary. Further details at your ward/municipal office. Comments are welcome.
1. The resident is duly paying their income and residence taxes in Japan. Meaning, non tax paying residents (students/volunteers/dependents etc.) are not eligible.
2. The resident is actually providing financial support to their family relatives overseas. See section B below.
How to Apply: Residents must submit/show documents certifying;
1. Proof of the family relationship (see A below)
2. Proof of remittance (see B below)
1. If the mentioned documents are not in Japanese, a Japanese translation must be submitted as well.
2. Documents are required within the current calendar year, so as to calculate your next calendar year tax bill.
(e.g. 2020 remittances must be filed in 2020 for 2021 tax reductions. 2019 remittances are no longer acceptable now. etc.)
3. Documentation is required for each family member claimed as a dependent. Meaning, when applying for dependents deduction regarding two or more relatives overseas, remittances need to be made to each of such relative individually. In short, if you are a tax payer who has 5 dependents, you need to remit to each one of your 5 dependents separately for them to qualify. If you remitting money only to one dependent (as representative of other relatives/dependents) only that person will be accepted as dependent. Furthermore, direct cash hand over (cash delivery when traveling) has no proof of transaction and therefore is not accepted.
A: The required documents showing the family relationship.
The catch is that you can only register a dependent if you are related by blood. Accordingly, for documents issued by foreign governments (i.e. Kenya etc.), the tax office needs to see a document containing the name, date or birth and address of the non-resident relative. If a single document does not show all of the name, date of birth and address then you are allowed to combine various relevant documents in aim of creating the complete picture. Documents must include full names and dates of birth.
Document sample list (of you and your family member abroad)
A11. A copy of your passport showing your full names and date of birth
A12: Your Child – Birth certificate of the child showing you as their parent.
A13: Your Parent – Your birth certificate showing that person listed as your parent.
A14: Your Grand Parent – Your parent’s birth certificate showing them as a child of that person, + document A13 above.
A15: Your Sibling – Birth certificate of that person showing Mr.A/Ms.A as their parent, + document A13 above.
You and your sibling parents names must match (only one parent match is OK).
A16: Your Spouse- Your marriage certificate showing that person as your spouse.
A17: Your Spouse’s Parent – Birth certificate of the spouse showing that person listed as their parent, + document A16 above.
B. Documents certifying that a remittance was made
B1: Remittance certificate or a copy of the remittance request form.
Note that the remittance sender must be an account in your name, and the recipient must be an account name of the dependent. Mpesa transactions will not work.
B2: Credit card statements (if applicable)
Only a credit card the reporting person has obtained for use by his/her family member is permitted, and the reporting person must be paying the card’s payment.
Please prepare documents that show the card was used during the previous year.
This does not mean certificates or receipts showing the reporting person paid the bills.
The end. Happy savings.