Tax Administrators and Tax Agents in Japan

As part of our series on taxes in Japan, we published a complete guide to Japanese property tax for foreigners. One of the topics that that report addresses is the role of tax administrators in Japan.

Below we provide more detail about Japanese tax administrators, what services they provide, different types of people in Japan that can serve as tax representatives, and related topics.

What is a Tax Administrator in Japan?

A Japanese tax administrator is an individual or company that you designate as your representative on financial matters, to receive financial notices, to receive money owed to you within Japan, to make payments on your behalf to the Japanese government and local business, and to potentially send money back to you in your home country.

A person or company in Japan that serves as your tax representative is called a nouzeikanrinin (納税管理人 in kanji, or のうぜいかんりにん in hiragana).

Instead of making the above tax payments directly, one has to appoint the tax administrator to facilitate both the national and local tax payments… The tax administrator does not have to be a tax accountant.
— From Winning Strategies for Japan Real Estate Investment, by Neo Cheung

Here is some related language from the Japanese government:

[Y]ou must appoint a tax agent who resides in Japan and submit a “Notification of Tax Agent” to the district director of the tax office which has jurisdiction over your place for tax payment. Your tax agent will deal with the tax procedures on behalf of you. You can appoint a Japanese corporation or a person who resides in Japan as your tax agent.
— National Tax Agency, Japan

That description from the NTA in Japan is in reference to having a tax agent that can represent you for income tax in Japan, but the same emphasis can be applied to other local financial representation, such as the payment of property tax in Hokkaido (or other areas of Japan).

When individuals who do not have domiciles in Japan, or corporations conducting economic activities in Japan, as well as Japanese branches of foreign corporations that do not have a head office or an office in Japan need to file tax returns, they must appoint a tax agent and submit a notification.
— Japan External Trade Organization (JETRO)

In the quote above, JETRO again restates the opportunity to design a tax agent. Also note that when you appoint a tax representative in Japan, part of that process is submitting a notification to the Japanese government. For companies that owe income tax to the Japanese government this is more important, but the process applies for more simple roles that enable to you to pay property taxes as well. We provide more detail on the notification paperwork below.

It should be noted that “tax administrator” is a translation of a phrase in Japanese. That same original phrase in Japanese might also translate to tax representative or tax agent, depending on the speaker. The exact meaning of any of these terms may differ from source to source.

Benefits of a Working with a Japanese Tax Administrator

For the purposes of this article, we assume the tax administrator is being hired by a foreigner to serve as a local contact and agent for receiving and paying local bills.

The primary benefits of local tax agent in Japan are: 1.) That the person has a local address in Japan where the Japanese government, and local businesses, or even local clients and property tenants, etc., can send bills and payments, and 2.) That the local tax representative can legally obtain a local Japanese bank account, and can receive and make payments on your behalf, via wire transfer, or in person.

Requirements To Be a Tax Agent in Japan

For the basic services provided by a local tax administrator in Hokkaido or other locations in Japan, the only requirements are that the person is a legal adult, that they reside in Japan, and that they have an address that can receive statements.

You can hire a professional or a company to serve as your tax representative. You can also appoint a trusted friend or family member to this role.

There are instances where the person you appoint has more formal responsibilities – such as being the financial designee for a Japanese company, or someone responsible for your income tax in Japan – but for simple payment of local or national bills, no special certification or licensing is required. This system is available in any Japanese city. Even when paying property taxes in Osaka, for example, assigning a local tax administrator will help you pay local taxes even if you reside outside Japan.

What Services are Provided by Tax Agents for Foreigners in Japan?

A Japanese tax administrator may; receive bills and payments from within Japan on your behalf, hold money for you in a local Japanese bank account, pay local and national bills for you, as well as receive money from you from your home country, and send funds back to you in your home country.

Typical sources of income that a Japanese tax administrator might collect on your behalf are: income from Japanese business that you own, rent from properties owned in Japan, refunds from overpayment of tax (such as real estate acquisition tax in Japan), and pension payments paid to you from the Japanese government.

Types of bills paid by a tax administrator in Japan include: real estate acquisition tax in Japan, local Japanese property tax payments, income tax, Japanese resident taxes, bills for local utilities like electricity, gas service, and internet access, as well as for services paid to local companies for property management, home repair, maintenance, landscaping, snow removal, etc.

While any adult resident in Japan may be capable of performing these services for you, in some cases, the person or company you hire may also be qualified to provide you additional services.

Using a Property Management Company as a Tax Agent in Japan

Property management companies in Japan serve a range of functions from property maintenance, to acting as a leasing agent and keeping properties rented. For many foreigners that own property in Japan, Japanese property management companies are the best and easiest way to hire a tax administrator in Japan.

As we wrote about in our article about property taxes in Japan, foreigners that own Japanese property commonly struggle with property taxes, primarily because they aren’t in Japan to receive the local Japanese property tax bill, and to pay it before the tax is due.

Property management companies commonly perform this tax agent service for foreign clients. Property management companies can receive and pay the real estate acquisition tax, handle annual property taxes in Japan, and can pay for utilities.

If the property management company isn’t required to visit the home, to provide maintenance, or to manage tenants, these simple tax representative services can be cost-effective, and solve many of the most common challenges of non-resident property owners in Japan.

If the property earns income, then the tax obligations of the property owner are more complicated. In that case, annual tax reporting is also required by the Japanese national government. The foreign property owner in Japan may choose to work with a local licensed tax accountant in Japan as the tax agent, or may hire a combination of a tax accountant, a property manager, and/or a tax agent, and have them work together to take care of their respective duties.

For help finding a property manager that can serve as a tax administrator in Japan, contact us. We can make person-to-person recommendations for real estate professionals in Hokkaido.

Using a Tax Accountant as your Tax Agent in Japan

If you own a Japanese company, earn taxable income in Japan, or otherwise have to file taxes in Japan, in many instances a local Japanese tax specialist can manage your taxes, and may also be willing to serve as a tax representative.

The services of a Japanese tax accountant are specialized, they are typically more expensive per-hour than property management services. Most owners of second homes or other property in Japan that does not produce income will not usually need that extra expense of a Japanese tax accountant. However, if you already have the need to do business with a tax specialist in Japan, some of these professionals can make other local payments and financial transactions on your behalf. Many foreigners use Japanese tax accountants as their tax representative.

For prescreened recommendations for local tax services in Hokkaido, contact us.

Notification for the Appointment of Tax Agent

The Japanese government requires you to complete a form called the “Notification Form of Appointment of Tax Agent” (納税管理人の届出書) to the local government agency where you owe taxes. In principle, as long as your taxes are paid on time (particularly if they are paid in cash), this registration may not become an issue.

If you are working with a company that provides property management service in Hokkaido, or a local tax accountant, that company can guide you through the completion of any related notification.

Hiring a Local Japanese Tax Representative

Whether you need simple tax administrator services that can be provided by a local property management company in Hokkaido, or more complicated tax services that might benefit from certified tax accountants in Hokkaido, contact us and we can make an introduction.

We help clients with the basic challenges of owning property in Hokkaido every day. We are happy to help. Our services are always free to you.

We work for you, not the real estate companies.

We provide person-to-person introductions to prescreened agents that help you sell, buy, lease, or rent property in Hokkaido. We search our custom database to connect you to real estate professionals that speak your language, address your needs and are available now to help you find what you want.

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For More Information:

— See our piece about various Taxes in Japan
— Our detailed Guide to Paying Property Taxes in Japan
— We provide a list of Sapporo Tax Offices
— In Hokkaido, there are areas with special rates for property taxes
— Our review of the role of Property Management Companies in Sapporo
— Buying Property in Hokkaido as a Foreigner
— Our list of Tax Accountants for Expats Living in Japan
— Our complete guide for Buying a House in Sapporo
— Our report on How to Rent an Apartment in Sapporo and Move-In Costs for Sapporo Apartments
— Find Lawyers in Hokkaido