What Role Does the Withholding Tax Statement Play in a Permanent Residence Application?

Regarding the Withholding Tax Statement in a Permanent Residence Application

There are cases where you may submit a withholding tax statement (gensen choshu hyo) issued by your employer when applying for Permanent Residence. To begin with, it should be noted that the withholding tax statement is not a mandatory document for a Permanent Residence application. Even so, there are real situations in which the withholding tax statement is submitted as part of a Permanent Residence application.

If you are reading this page, you are likely someone who wants to obtain Permanent Residence as soon as possible.
This section explains why you might submit a withholding tax statement, which is not originally a mandatory document, and when it is preferable to submit one in a Permanent Residence application.

The Role of the Withholding Tax Statement in a Permanent Residence Application

The withholding tax statement is a document issued by your employer at year-end, and it shows the amount of income earned over the course of one year. As a general rule, unless you file a final tax return, the taxation certificate issued by the municipality will show the same income amount as the withholding tax statement.

As you may know, the submission of a taxation certificate issued by the municipality is mandatory for a Permanent Residence application. However, a taxation certificate cannot be issued until May of the following year at the earliest. In other words, it takes about 5 months for the income earned from January to December of a given year to be reflected in the taxation certificate.

This brings up a question: if your most recent income satisfies the income requirement for a Permanent Residence application, must you wait until May to obtain the taxation certificate before you can apply?

This is a particular concern for foreign nationals holding the Highly Skilled Professional visa, since the period covered by the taxation certificates they need to submit is only 1 year or 3 years, and many of them want to obtain Permanent Residence as soon as possible.

In such cases, by submitting a withholding tax statement, it may be possible to obtain Permission for Permanent Residence without waiting for the taxation certificate that will be issued in May.

In Permanent Residence applications made under these circumstances, the withholding tax statement issued by the employer is sometimes submitted as a substitute for the most recent taxation certificate.

How to Submit the Withholding Tax Statement

While we have explained above that submitting a withholding tax statement can in some cases substitute for the taxation certificate, the underlying premise is that the document to be submitted to the Immigration Bureau is the taxation certificate.

The withholding tax statement can only substitute for the most recent 1 year of income. Proof of income for other years requires the submission of taxation certificates. In other words, it is not possible to prove income for all years using withholding tax statements.

For years for which a taxation certificate can be issued, the taxation certificate must always be submitted. Also, it is preferable to submit a taxation certificate over a withholding tax statement, so use the withholding tax statement to prove your most recent income only when you really need to file before May.

When submitting the withholding tax statement, it is preferable to have your employer affix their corporate seal to it. This is because withholding tax statements can be easily forged, so to ensure that the document submitted is treated as authentic, you should, wherever possible, have your employer affix the corporate seal.

These days, fewer companies hand out withholding tax statements directly, and printing them from a computer has become very common. In this case as well, you should have the corporate seal affixed to the printed withholding tax statement.

How to Handle Matters During the Review Period

Even when you have submitted a withholding tax statement as a substitute for the most recent taxation certificate, the most recent taxation certificate may become issuable during the review period. Because the review period for a Permanent Residence application is long, even if you apply with a withholding tax statement without waiting for the taxation certificate, the time when the taxation certificate becomes available may arrive during the review.

In such a case, the Immigration Bureau will almost certainly request the latest taxation certificate as an additional document. If the amount on the withholding tax statement and the amount on the taxation certificate are the same, this will not be a problem. However, caution is required if you filed a final tax return for that year.

A typical example is when you have a side business and that side business is operating at a loss. If you report the side-business loss on your final tax return, your taxable income amount becomes lower. In this case, depending on the amount, your income may no longer satisfy the income requirement, and the application could be denied.

Furthermore, since a Permanent Residence application requires the submission of your work history, and some Statuses of Residence prohibit side businesses, you must be careful on both fronts. If your side business was not listed on your submitted résumé, or if you were running a side business while on a Status of Residence that prohibits it, the likelihood of denial increases.

If you have no side business and have not filed a final tax return, the taxation certificate issued will match the withholding tax statement, so there is no problem.

Summary: The Role of the Withholding Tax Statement in a Permanent Residence Application

This page has explained the withholding tax statement in a Permanent Residence application. The key points are:

The above is the summary.

If you are considering a Permanent Residence application and want to apply right away — that is, you cannot wait until the taxation certificate is issued — please feel free to consult our office.