Japan at a Glance
Taxation and Office Etiquette in JapaniStockphoto
Politeness and conservative manners are crucial when working in Japan.
As is the case in most countries all over the world, taxation is unfortunately quite as inevitable in Japan. Direct taxes are levied on three different levels: the national, the prefectural, and the local one.
National taxes include, for example, inheritance tax and the annual income tax. As a car-owner, you have to pay your automobile tax to the prefecture where you reside, and there is both a prefectural and a local residence tax.
As far as the Japanese income tax is concerned, a foreign national who lives in Japan for more than 183 days a year probably counts as a non-permanent fiscal resident. This means that all income paid to you in Japan is also taxable there, even if the source of the income should be abroad. However, if a non-permanent resident’s income from abroad stays overseas, it cannot be taxed in Japan.
Specific incomes like salaries and wages are included in the withholding tax system. They will be deducted from your paycheck, but you still have to list them in your annual tax return. In Japan, the income tax return has to be filed between February 16 and March 15 every year.
Seeking Tax Advice
However, things like determining fiscal residency, avoiding double taxation, and minimizing your taxes are rather difficult to work out for people who are unfamiliar with tax laws. For this reason, we recommend you to seek advice from an international tax advisor both at home and in Japan. Thus you will get competent information on the tax system of both nations and your individual situation as a tax-paying expat.
If you are an expatriate from another East Asian nation, such as Hong Kong and Taiwan, certain aspects of doing business in Japan will probably be familiar to you. For an expat from a different cultural area, Japanese business etiquette means facing a lot more unexpected pitfalls.
The following advice can by no means replace studying up-to-date and comprehensive business guides to Japan or, even better, attending a cross-cultural training seminar.
Upon encountering your Japanese business contacts or co-workers, follow their lead when it comes to choosing the appropriate form of greeting (a handshake or a bow). Avoid too much eye-contact. What may count as honesty, frankness, or friendliness in your country could be interpreted as a rude stare in Japan.
When it comes to small talk, as a foreign visitor or resident, you can never go wrong with mentioning a few things you like about Japan. Direct criticism – be it of Japan, your colleagues, the suggestions presented in the meeting, etc. – should be avoided at all cost.
The exchange of business cards is an important ritual at the beginning of meetings, conferences, negotiations, etc. Treat those cards with respect. This means: Don’t fold them; don’t scribble on them; don’t put them away hastily and without looking at them; don’t simply stuff them in your pocket.
Forms of Address
Make sure to address business partners with their family name followed by –san (a polite term for Mr / Mrs / Miss / Ms), e.g. Ōtomo-san for Mr Otomo and Ikeda-san for Ms Ikeda. Official titles like professor or director are also important.
However, you should only address Japanese people by their given name if they explicitly offer this to you. Non-native speakers unsure about the subtleties of the Japanese language should also avoid more colloquial forms of address, such as Katsuhiro-kun among men or Ryoko-chan for younger women and female relatives.
Make sure to wear neat, elegant, understated and, above all, conservative clothes (including shoes and accessories). That way, you will make a positive first impression. Remember that, as a gaijin, you will be perceived as an outsider – even if you have been living as an expatriate in Japan for several years.
Doing business in Japan might take more patience than you may be used to. However, this is no reason for disrespecting the basic socio-cultural values of hierarchy, harmony, and loyalty. Reminding yourself of these, even when you should be confused or frustrated, will help you do a great job.