Estimated tax prepayment system (予定納税)

27 Aug 2025 | #japan | #tax | #money

On July 31st my bank account had a direct debit charge of 52,900 yen with the note シンコクシヨトクゼイ. This is how I learned about the estimated tax prepayment system.

Background

As a salaried employee my company mostly handles my taxes. I have some investments in an Interactive Brokers account where tax is not withheld, and I have ETFs and stocks there that pay some dividend, so I still need to file tax in February to declare those and pay the tax. Since dividends from US securities get taxed 10% in the US, I can claim foreign tax credit and pay only another 10% tax in Japan. This usually comes out to about 20-30,000 yen tax to pay, and I have been paying that in February each year.

However last year I did a rebalance in the investment account (sold some ETFs and bought another one), which meant I realized 1.2 million yen gains, which meant I was on the hook for 240,000 yen capital gains tax. Moreover dividends were also higher than usual, resulting in an additional 38,000 yen tax from that. I paid these in February and didn’t think of it more. But the NTA thought differently.

Pay your taxes early

If based on last year’s income the tax office estimates that you will have 150,000 yen or more tax to pay, then they will charge 1/3 of it in July (first installment, 第１期分) and 1/3 of it in November (second installment, 第２期分).

If your income is expected to be less than last year, then you can ask for an exemption, but since I wasn’t charged that much, I decided to just go ahead with it.

At tax filing time, I will need to include this and it will be used to offset any outstanding tax obligation, and the rest will be refunded. So it is not an extra tax, simply a prepayment.

How they arrived to the 52,900 yen amount that I was charged, I’m not sure. Based on the extra tax I had to pay last year, I would have expected it to be more, but I won’t complain.

Online notification

I actually got very lucky that I had my bank account’s direct debit configured with the tax office. During tax filing there was a section to ask for electronic delivery of the estimated tax amount notice that I likely selected, which meant I didn’t get any paper notification:

 なお、令和６年分の所得税及び復興特別所得税の確定申告において、予定納税額の通知書の「電子交付」を希望した方については、予定納税額の通知書を書面の送付に代えてe-Taxにより通知しています。

However electronic notification is not an email, but rather a notification in e-Tax, which I totally missed. So should I not have had the direct debit configured, I would have had a late tax payment. Yikes.

This reddit answer has the steps to check the e-Tax notifications:

• login to https://myna.go.jp and to go to the message box お知らせ at the top right of the page
• There you should have a message titled 【税務署からのお知らせ】予定納税等通知書に関するお知らせ from June
• Open it and click the link e-Taxメッセージボックスへ
• That will have a button to pay directly from your bank account or via credit card

I also had the message there informing me of the amount that was later taken. A message that I totally missed.

Source

NTA’s Don’t forget to pay your first installment of estimated income tax site