If I become a resident or non-resident during 2024, will I be eligible for the flat-amount tax reduction?

In principle, non-residents are not eligible for the flat-amount tax reduction.

However, if you were a resident for a period during 2024 and your total income was 18,050,000 yen or less, you will be eligible.

If you become a resident from a non-resident in 2024

A fixed tax reduction is applied to income earned after the date of becoming a resident.

For salary income, it can be deducted from the monthly withholding tax amount (if you are a resident on June 1st) or by year-end adjustment.

If you have other income or are not subject to year-end adjustment, you can apply it by filing a tax return.

If you become a non-resident from a resident in 2024

A fixed tax reduction is available for income earned before becoming a non-resident.

In the case of salary income, it can be deducted from the monthly withholding tax amount (if you are a resident on June 1st) or by year-end adjustment (by the time of departure).

If you have other income or are not subject to year-end adjustment, you can submit a quasi-final tax return (by the time of departure).

If the fixed tax reduction is not applied in the year-end adjustment or quasi-final tax return at the time of departure, you can submit a quasi-final tax return (refund declaration) or a request for correction.

Not applicable if you are a non-resident through 2024

If you have no period of residency in 2024, you’re not eligible for the flat-amount tax reduction.

June 1st is a day to discuss whether or not you are eligible for the deduction of monthly salary withholding tax

The fixed tax reduction applies when withholding tax on wages paid from June onward to employees who are employed by a company on the base date of June 1.

In other words, whether you are a resident or non-resident around June 1 is not an issue when applying the fixed tax reduction.(This is the base date for determining whether you are subject to adjustments to your monthly withholding tax amount.)

If you are a resident at some point during 2024, you need to consider applying the fixed tax reduction.

Conclusion

I wrote about whether the fixed tax reduction applies if you become a resident or non-resident in 2024.

It is easy to make a mistake if you think that non-resident does not apply to the fixed tax reduction.

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都築太郎税理士事務所/Tsuzuki Taro Tax Accountant Office

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