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Japan: Worked Example of Tax on Rent

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Last Updated: Nov 14, 2006

Tax Example: Rent

Non-resident couple's joint monthly rental income1 US$1,500 US$6,000 US$12,000
Annual Rental Income 18,000 72,000 144,000
Less: Standard Costs2 (11,880)3 (29,700)4 (59,400)5
= Taxable Income 6,120 42,300 84,600
Income Tax Rates6
Flat Rate 10% 612 4,230 8,460
Annual Income Tax Due US$612 US$4,230 US$8,460
Tax Due as % of Gross Income 3.40% 5.88% 5.88%
Thanks to:
Grant Thornton Japan

DISCLAIMER: The information contained above is marketing material only and is not written tax advice directed at the particular facts and circumstances of any person and should not be relied upon. We encourage you to discuss your particular situation with us or an independent tax advisor. This information was last updated on November 14, 2006.

Notes

Grant Thornton Japan is a member firm of Grant Thornton International. Grant Thornton International is not a worldwide partnership. Member firms of the international organization are independently owned and operated.

1 The property is jointly owned by husband and wife.

2 Depreciation expense is claimed against the acquisition cost of the property and is computed through the straight-line method.

3 The property is worth US$600,000.

4 The property is worth US$1,500,000.

5 The property is worth US$3,000,000.

6 Nonresident foreign individuals are taxed at a flat 10% rate.

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