Covid-19 Crisis: Are the cash subsidies taxable or not?
Hi everyone,
If you’ve been reading my blogs, you’re already aware of the 3 kinds of cash subsidies in Japan during this coronavirus pandemic. They are:
- ¥100,000 for everyone in Japan who has a residence card since April 27, 2020
- ¥500,000 (Tokyo) for small business owners or freelancers (Amount differs per prefecture)
- ¥1,000,000 for freelancers
The question is: When you file for your tax return, will you declare these money as income?
Japan residents’ ¥100,000 payout is non-taxable (*’▽’)
The Ministry of internal Affairs and Communications (MIC) says “According to the law, this subsidy is non-taxable.” This means there’s no need to declare this amount in your income.
Subsidy for business closure is taxable (-_-;)
The Bureau of Industrial and Labor Affairs Tokyo Metropolitan Government says “Tokyo Metropolitan Government requested for the subsidy to be tax exempt, but the appeal was denied by the national government.”
this information can be found on Tokyo Metropolitan Government’s website
However, it’s also possible for a new law, like the recent「特例法」, to be passed and make this subsidy tax exempt so let’s wait and see until the end of this year.
Freelancer subsidy up to ¥1,000,000 yen is taxable (´；ω；`)
According to METI, “From a taxation point of view, this subsidy will be included in your gross income.”
The most important thing..
I hope you found all these information useful. These times are difficult and the crisis is not yet over, but the important this is to keep going and never give up! Better days are coming for everybody.
Stay Safe,
Akiko
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