Fixed amount reduction of individual inhabitant tax

The outline of the tax reform for fiscal year 2024 was approved at a Cabinet meeting on December 22, 2023, and a fixed-amount tax reduction in local resident taxes for fiscal year 2024 will be implemented as part of measures to prevent Japan's economy from reverting to deflation.

Taxpayers whose total income for individual inhabitant tax for the fiscal year 2024 is 18,050,000 yen or less (taxpayers whose income is only salary and is 20,000,000 yen or less)

You are not eligible if any of the following apply to you:

• If you are exempt from individual resident tax
• If only individual inhabitant tax per capita and forestry environment tax (national tax) are levied

For the fiscal year 2024 individual inhabitant tax, the total amount of the following special deductions will be deducted from the taxpayer's income tax amount.

Amount of special deduction (1) 10,000 yen for the person (2) 10,000 yen for each spouse or dependent (excluding those residing overseas)

Note: If the total amount of special deductions exceeds the person's income tax rate, the amount of the income tax rate will be the limit. Note: For spouses living in the same household, excluding spouses eligible for deductions, 10,000 yen will be deducted from the amount of income tax rate for the fiscal year 2025. Note: In principle, the determination of spouses living in the same household and dependents is based on the current situation as of December 31 of the previous year.

• For those who have special collection (salary deduction)

The tax amount after the fixed tax reduction will not be collected in June 2024, the first month of collection, but will be deducted from your salary in 11 installments from July to May of the following year.

• For those who pay by ordinary collection (by payment slip, direct debit, etc.)

The amount equivalent to the special deduction will be deducted from the amount paid in the first installment, and the difference will be paid. If the amount cannot be deducted from the first installment, it will be deducted from the amount paid in the second installment and thereafter.

• For those who are subject to special pension collection (pension deduction)

The amount equivalent to the special deduction will be deducted from the pension withholding amount for October 2024, and the difference will be deducted from the pension. If the amount cannot be deducted from the October tax, it will be deducted sequentially from the special collection tax amount for December and onwards.

• The income tax rate used to calculate the hometown tax donation limit is the income tax rate before the fixed tax reduction, so it is not affected by the fixed tax reduction.
• If the tax cut is not enough, a separate subsidy (adjustment benefit) will be paid. For details of the subsidy, please refer to the Cabinet Secretariat website "Integrated subsidy and fixed tax cut measures for a new economy."

• For details on the fixed-amount tax reduction on income tax (national tax), please refer to the National Tax Agency's website "Special site for fixed-amount tax reduction."