Working in Japan?
Taxation and Office Etiquette in Japan
How to Pay Your Taxes
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, liquor or tobacco 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.
For foreign nationals, the Japanese income tax system can be very complicated. If you have lived in Japan for more than 183 days in a year, you will be classed as a “Resident” and are likely to be subject to some form of income tax on any income you receive within. If you have lived in Japan for less than five out of ten years, any income you receive from outside of Japan will be exempt from Japanese taxation. That does not mean you will not be subject to other Japanese taxes such as inhabitance tax.
Japan uses a self-assessment tax system, and 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 16 February and 15 March 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 that you 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.
A Japanese Style of Business
If you are an expatriate from another East Asian nation, such as Hong Kong or 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.
Fitting In at Work
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.
Kon’nichiwa! Meeting Your New Colleagues
Make sure to address business partners with their family name followed by san (a polite term for Mr. / Mrs. / Miss / Ms.), for example 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.
Making a Good First Impression
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 are 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 may be confused or frustrated, will help you do a great job.
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