Japan to Launch Tax Identification Number System

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By Molly Ward

Feb. 5 — A new tax identification number system in Japan is to go into effect on Jan. 1, 2016. Individuals will be notified of a unique 12 digit individual number beginning in October 2015, to be used for administrative procedures related to social security, taxation and disaster responses.

Under the Social Security Tax Number System, a number will be assigned to each individual who has legally resided with a resident registration in Japan. Therefore, both Japanese nationals and foreign residents in Japan who have registered with a local municipality will be assigned a 12-digit number. Short term visitors will not be eligible for a number.

Employers will be required to collect and manage numbers for employees, including part-time workers, in order to withhold taxes. However, employers will not be allowed to use the numbers as employee identification numbers.

The number will serve individuals for their lifetime. Individual numbers must be presented to employers for notation on certificates of income and withholding tax. Employers should note the numbers for individuals and dependents on the certificate of income and withholding tax before submitting them to the tax office and municipality.

Individual number cards, which are separate from the information cards to be mailed in October notifying numbers, will only be issued to residents wanting to receive them. These cards will be allowed as personal identification and can be used for online tax returns. The cards also may be used for library services or issuance of seal registration certificates. Personal number cards will be valid for 10 years for those over the age of 20 and five years for those under 20 years of age.

The system will not establish a centralized database of information. The information will instead be separately stored within each of the current governmental organizations, requesting information from each other when necessary.

The so-called “My Number Act” was approved by the Japanese parliament in 2013.

To contact the reporter on this story: Molly Ward at mward@bna.com

To contact the editor responsible for this story: Michael Baer at mbaer@bna.com

An overview of the tax number system can be found at http://www.cas.go.jp/jp/seisaku/bangoseido/english.html.

The Act can be found at http://www.cas.go.jp/jp/seisaku/bangoseido/pdf/en3.pdf.

More information on personal number cards can be found, in Japanese, at http://www.cas.go.jp/jp/seisaku/bangoseido/faq/faq3.html .

More information on payroll issues in Japan can be found in the Japan country primer.