Income Tax Act

A person paying, in Japan, a salary or other wage as prescribed in Article 28, paragraph (1) (Salary Income) (hereinafter referred to as a "salary or other wage" in this Chapter) to a Resident must withhold income taxes from that salary or other wage at the time of payment and pay them over to the national government no later than the tenth day of the month after that in which the date of withholding falls.

If a bonus given to a corporation's officers as prescribed in Article 2, item (xv) (Definitions) of the Corporation Tax Act is not paid by the day that marks one year's time since the date on which the decision to pay the bonus was finalized, the payment is deemed to have been made on the day that marks one year's time since that date, and the preceding paragraph applies.

Notwithstanding the preceding Article, a person paying a salary or other wage only to two or fewer domestic employees on a regular basis is not required to withhold income taxes from that salary or other wage and pay them over.

The amount of income tax to be withheld pursuant to Article 183, paragraph (1) (Obligation to Withhold Taxes) from a salary or other wage other than a bonus as prescribed in the following Article is the amount of tax specified in each of the following items for the category of salary or other wage set forth in the item:

a salary or other wage paid to a Resident who has filed a salary income earner's return for deduction for Dependents, etc. by the person paying a salary or other wage through whom that return was filed: the amount of tax specified below for the category of case set forth below, according to the amount of the salary or other wage (in the case set forth in (b), (c), (d), or (f), the amount equivalent to twice that amount, the amount equivalent to three times that amount, the monthly amount of the salary or other wage, or the daily amount of the salary or other wage, respectively) and to whether there are any, and the number of, spouses for withholding deduction and relatives for withholding deduction stated in that return (if the Resident is paid salaries or other wages by two or more persons paying a salary or other wage, the spouse for withholding deduction and relatives for withholding deduction prescribed in Article 194, paragraph (1), item (vi) (Salary Income Earner's Return for Deduction for Dependents, Etc.), and if a spouse for withholding deduction or relative for withholding deduction stated in that return is a relative residing outside Japan as prescribed in paragraph (5) of that Article (referred to as a "relative residing outside Japan" in Article 187 (Amount Withheld for Persons Eligible for the Disability Deduction and Similar Deductions) and Article 190, item (ii), (c) (Year-End Adjustment)), limited to the spouse for withholding deduction and relatives for withholding deduction for whom the documents prescribed in Article 194, paragraph (5) have been submitted or presented; referred to as the "spouse and relatives for withholding deduction on the main salary" in the following Article):

if the salary or other wage is to be paid every month: the amount of tax set forth in column A of Appended Table 2;

if the salary or other wage is to be paid every half month: the amount of tax equivalent to one half of the amount of tax set forth in column A of Appended Table 2;

if the salary or other wage is to be paid every ten-day period: the amount of tax equivalent to one third of the amount of tax set forth in column A of Appended Table 2;

if the salary or other wage is to be paid at intervals of a whole-number multiple of a month: the amount of tax equivalent to the amount calculated by multiplying the amount of tax set forth in column A of Appended Table 2 by that multiple;

if the salary or other wage is to be paid every day: the amount of tax set forth in column A of Appended Table 3;

in cases other than those set forth in (a) through (e): the amount of tax equivalent to the amount calculated by multiplying the amount of tax set forth in column A of Appended Table 3 by the number of days for which the salary or other wage is paid;

a salary or other wage other than those set forth in the preceding item and the following item: the amount of tax specified below for the category of case set forth below, according to the amount of the salary or other wage (in the case set forth in (b), (c), (d), or (f), the amount equivalent to twice that amount, the amount equivalent to three times that amount, the monthly amount of the salary or other wage, or the daily amount of the salary or other wage, respectively), to whether a return for deduction for dependents, etc. regarding secondary salaries has been filed, and to the number of spouses for withholding deduction and relatives for withholding deduction prescribed in Article 195, paragraph (1), item (iii) (Return for Deduction for Dependents, etc. Regarding Secondary Salaries) stated in that return (if that spouse for withholding deduction or relative for withholding deduction is a person for whom the statement referred to in paragraph (5) of that Article has been made, limited to the spouse for withholding deduction and relatives for withholding deduction for whom the documents prescribed in that paragraph have been submitted or presented):

if the salary or other wage is to be paid every month: the amount of tax set forth in column B of Appended Table 2;

if the salary or other wage is to be paid every half month: the amount of tax equivalent to one half of the amount of tax set forth in column B of Appended Table 2;

if the salary or other wage is to be paid every ten-day period: the amount of tax equivalent to one third of the amount of tax set forth in column B of Appended Table 2;

if the salary or other wage is to be paid at intervals of a whole-number multiple of a month: the amount of tax equivalent to the amount calculated by multiplying the amount of tax set forth in column B of Appended Table 2 by that multiple;

if the salary or other wage is to be paid every day: the amount of tax set forth in column B of Appended Table 3;

in cases other than those set forth in (a) through (e): the amount of tax equivalent to the amount calculated by multiplying the amount of tax set forth in column B of Appended Table 3 by the number of days for which the salary or other wage is paid;

a salary or other wage prescribed by Cabinet Order which is calculated on the basis of the days or hours worked and is paid for each day worked: the amount of tax set forth in column C of Appended Table 3 according to the amount of that salary or other wage.

Cabinet Order provides for the meaning of the monthly amount and daily amount prescribed in items (i) and (ii) of the preceding paragraph and for other necessary particulars concerning the application of the provisions of that paragraph.

Except where the provisions of the following paragraph apply, the amount of income tax to be withheld pursuant to Article 183, paragraph (1) (Obligation to Withhold Taxes) from a bonus (including a salary in the nature of a bonus; hereinafter the same applies in this Article) is the amount of tax specified in each of the following items for the category of bonus set forth in the item:

a bonus paid to a Resident who has filed a salary income earner's return for deduction for dependents, etc. by the person paying a salary or other wage through whom that return was filed: the amount of tax specified below for the category of case set forth below:

if the person paying the bonus has paid or is to pay any other salary or other wage (hereinafter referred to as an "ordinary salary" in this Article) to the Resident being paid the bonus during the previous month (if the ordinary salary paid by the person paying the bonus is to be paid at intervals of a whole-number multiple of a month, including where no ordinary salary is paid during the previous month; the same applies in (a) of the following item and in the following paragraph): the amount of tax equivalent to the amount calculated by multiplying the amount of the bonus by the rate obtained from column A of Appended Table 4 according to the amount of the ordinary salary paid or payable during the previous month (if the ordinary salary paid by the person paying the bonus is to be paid at intervals of a whole-number multiple of a month, the monthly amount prescribed in paragraph (1), item (i) of the preceding Article of the ordinary salary paid or payable immediately before the payment of the bonus; the same applies in (a) of the following item and in the following paragraph) and to whether there are any, and the number of, spouses and relatives for withholding deduction on the main salary stated in the salary income earner's return for deduction for Dependents, etc.;

in cases other than that set forth in (a): the amount of tax equivalent to the amount calculated by multiplying by six (or by 12, if the period used as the basis for calculating the amount of the bonus exceeds six months; the same applies in (b) of the following item and in the following paragraph) the amount of tax set forth in column A of Appended Table 2 according to the amount equivalent to one sixth of the amount of the bonus (or one twelfth, if the period used as the basis for calculating that amount exceeds six months; the same applies in (b) of the following item and in the following paragraph) and to whether there are any, and the number of, spouses and relatives for withholding deduction on the main salary stated in the salary income earner's return for deduction for Dependents, etc.;

a bonus other than that set forth in the preceding item: the amount of tax specified below for the category of case set forth below:

if the person paying the bonus has paid or is to pay an ordinary salary to the Resident being paid the bonus during the previous month: the amount of tax equivalent to the amount calculated by multiplying the amount of the bonus by the rate obtained from column B of Appended Table 4 according to the amount of the ordinary salary paid or payable during the previous month;

in cases other than that set forth in (a): the amount of tax equivalent to the amount calculated by multiplying by six the amount of tax set forth in column B of Appended Table 2 according to the amount equivalent to one sixth of the amount of the bonus.

If the person paying a bonus has paid or is to pay an ordinary salary to the Resident being paid the bonus during the previous month, and the amount of the bonus exceeds the amount equivalent to 10 times the amount of the ordinary salary paid or payable during the previous month, the amount of income tax to be withheld from that bonus pursuant to Article 183, paragraph (1) is the amount of tax specified in each of the following items for the category of bonus set forth in the item:

a bonus paid to a Resident who has filed a salary income earner's return for deduction for Dependents, etc. by the person paying a salary or other wage through whom that return was filed: the amount of tax equivalent to the amount calculated by multiplying by six the difference between the amount of tax set forth in column A of Appended Table 2 according to the sum total of the amount equivalent to one sixth of the amount of the bonus and the amount of that ordinary salary and to whether there are any, and the number of, spouses and relatives for withholding deduction on the main salary stated in the salary income earner's return for deduction for Dependents, etc., and the amount of tax set forth in column A of Appended Table 2 according to the amount of that ordinary salary and to whether there are any, and the number of, spouses and relatives for withholding deduction on the main salary stated in that return;

a bonus other than that set forth in the preceding item: the amount of tax equivalent to the amount calculated by multiplying by six the difference between the amount of tax set forth in column B of Appended Table 2 according to the sum total of the amount equivalent to one sixth of the amount of the bonus and the amount of that ordinary salary, and the amount of tax set forth in column B of Appended Table 2 according to the amount of that ordinary salary.

If the salary or other wage last paid in a year to a Resident who has filed a salary income earner's return for deduction for dependents, etc. is an ordinary salary subject to the provisions of Article 190 (Year-End Adjustment), a bonus is paid in the month in which the day of payment of that ordinary salary falls, and a shortfall as prescribed in that Article is expected to arise if that Article were applied to the salaries or other wages whose payment to the Resident during that year is finalized based on the circumstances as of the day on which that bonus is paid (including, if the Resident has filed another salary income earner's return for deduction for dependents, etc. through another person paying a salary or other wage in that year, the salaries or other wages prescribed by Cabinet Order whose payment to the Resident during that year by that other person has been finalized), notwithstanding the provisions of paragraph (1), item (i) or item (i) of the preceding paragraph, the amount of income tax to be withheld from that bonus pursuant to Article 183, paragraph (1) may be the sum total of the amount of tax under those provisions and the amount of tax equivalent to that shortfall.

If a spouse stated as a spouse for withholding deduction (hereinafter referred to as a "covered spouse" in this Article) in a salary income earner's return for deduction for Dependents, etc. or return for deduction for Dependents, etc. regarding secondary salaries filed by a Resident (hereinafter referred to as a "covered Resident" in this Article) is subject to the provisions of Article 185, paragraph (1), item (i) or (ii) (Amount Withheld from a Salary or Other Wage Other Than a Bonus), paragraph (1), item (i) or paragraph (2), item (i) of the preceding Article, or Article 203-3, items (i) through (iii) (Amount Withheld), with the covered Resident as a spouse for withholding deduction stated in a salary income earner's return for deduction for Dependents, etc. or return for deduction for Dependents, etc. regarding secondary salaries, or a return for Dependents, etc. by a recipient of a public pension or retirement package, filed by the covered spouse, the provisions of Article 185, paragraph (1), items (i) and (ii) and paragraph (1), item (i) and paragraph (2), item (i) of the preceding Article apply by deeming that the covered spouse is not stated as a spouse for withholding deduction in the salary income earner's return for deduction for Dependents, etc. or return for deduction for Dependents, etc. regarding secondary salaries filed by the covered Resident.