Application of Dependent Deductions, etc. for Non-Resident Relatives
If a resident taxpayer claims dependent deductions, etc. for non-resident relatives from withholding at source for salary, etc. to be paid on or after 1 January 2016 or year-end adjustments, the taxpayer is required to submit or present ‘Documents concerning relatives’ and ‘Documents concerning remittances’ for the concerned relatives to the payer of salaries (the employer). Please note that all documents need to attach Japanese translation if they are written in foreign languages.
2. ‘Documents concerning relatives’
‘Documents concerning relatives’ are documents listed in ① or ② below, proving that non-resident relatives are relatives of a resident taxpayer.
① A copy of supplementary family register or any other similar document issued by
the Japanese government or a local government and a copy of the passport of
the non-resident relatives
② A document issued by a foreign government or a foreign local government ( limited
to the document indicating the name, birthday and address or domicile of the
※If a single document is not enough to show all the information including the name,
birthday, and address or domicile of a non-resident relative, multiple documents are
required in order to give all the information.
(2) Points to be noted
① Except for a copy of the passport, the originals or original copies of such
documents should be submitted or presented.
②If a single document is not enough to show that a non-resident relative is a relative
of the resident taxpayer, multiple documents are required to give all the information.
For example, where the taxpayer would like to apply a dependent deduction to the
‘non-resident mother’ of the spouse, the following are required: 1) a document
certifying a marital relationship between the taxpayer and the spouse, and 2) a
document certifying a family relationship between the taxpayer’s spouse and her
mother. The two documents could prove that the spouse’s mother is the relative of
3. ‘Documents concerning remittances’
‘Documents concerning remittances’ are documents listed in ① or ② below, proving that a resident taxpayer made payments of living or education expenses for each non-resident relative in the year.
① Documents issued by financial institutions or copies of such documents, which
prove that the taxpayer made remittances to non-resident relatives through the
foreign exchange transactions of the financial institutions
→Copies of foreign remittance request forms
② Documents issued by credit card companies or copies of such documents, which
prove that the non-resident relatives used the credit cards (so called family cards) to
purchase goods or services and that the taxpayer consequently pays the bills
→Credit card statements of the family cards which were issued under the contract
between the taxpayer and the credit card company
(2) Points to be noted
① If the taxpayer has several non-resident relatives qualified for deductions,
documents concerning remittances should be prepared for each dependent. For
example, if the taxpayer makes the entire remittance including the living or education
expenses for the child to the spouse, it is treated as a remittance document only for
the spouse but not for the child.
② In principle, all documents concerning remittances during the year of
applying dependent deductions, etc. should be submitted or presented. However, if
the remittances to the same non-resident relative occur three times or more in the
year, the taxpayer is allowed to submit or present only the first and the last
remittance documents together with the statement stipulating certain matters
and omit submitting or presenting other remittance documents.
Even in this case, the taxpayer must keep such omitted documents.
4. Points for the payer of salaries
Due to the above new rules, the space for the information about non-resident relatives was added in the application form for dependent deductions, etc.
If the taxpayer gives the information about non-resident relatives in the application form, the payer of salaries should make sure that relevant documents such as ‘Documents concerning relatives’ and ‘Documents concerning remittances’ are also fully prepared.
In the ‘Documents concerning relatives’, the payer of salaries should confirm that the non-resident relative is a relative of the taxpayer (a relative by consanguinity within the sixth degree, a spouse, and a relative by affinity within the third degree). Also, it should be confirmed that non-resident relative’s name, birthday, and address or domicile in the application form are correct. In the ‘Documents concerning remittances’, the payer of salaries should confirm that the taxpayer made payments of living or education expenses to the non-resident relatives. In detail, the dates of remittances should be in the year of applying deductions for dependents, etc., and the receiver’s name of such remittances should be that of the non-resident relative. Since both documents may consist of several different types, it would increase the burden of administrative work by the payer of salaries. Also, the taxpayer should be noted that insufficient documents would not be qualified for deductions. In order to avoid such situations, the taxpayer’s company needs to conduct its administrative work carefully and systematically.
In this News, we have mentioned ‘Application of dependent deductions, etc. for non-resident relatives’. Please note that this News only introduces general outlines and does not include professional advice. So please make sure not to make any decisions without taking professional advice individually. If you have any questions, please feel free to contact us.
National Tax Agency