Japan To Expand Use Of Company, Individual ID Numbers

by Mary Swire, Tax-News.com, Hong Kong

07 September 2015

On September 3, Japanese lawmakers approved an expansion to the country's new system of individual and corporate identity (ID) numbers.

The expansion will allow the Government to link ID numbers to accounts held by an individual or company at financial institutions, with effect from 2018.

"My Numbers" are to be issued in October this year by local authorities to all residents, including foreigners who have legally resided in Japan for more than three months and have an address in the country. It will need to be quoted on all documents related to tax and social security administration from January 2016.

For example, Japanese residents will be asked to provide their My Number on application forms and other documents needed for national pensions, unemployment and medical insurance, child allowances, and other welfare benefits, as well as tax procedures, such as the filing of tax returns.

Information-sharing between central government agencies based on ID numbers will begin from January 2017, and at the local government level from July 2017.

ID numbers will need to be provided on all income tax returns. For individuals, this will be necessary beginning with their 2016 tax returns, to be filed in February or March 2017. For companies, this will be necessary beginning with their tax declarations for years starting on or after January 2016.

Employers will also need to quote their employees' ID numbers on certificates of income and withholding tax for employment income earned from January 2016.

Only one ID Number will be issued to a particular company. Corporate ID numbers will not be issued to a company's branch office or other business establishment.

TAGS: individuals | expatriates | compliance | tax | business | tax compliance | employees | withholding tax | social security | Japan