Japan has a progressive income tax system, made up of national, prefectural and municipal taxes. Employees are taxed between approximately 15% and 40% of their income in total contributions (2005 rates). Most employees have their taxes deducted from salaries by their employers. The self-employed and people who work for multiple employers or employers outside Japan are required to submit a tax return under a self-assessment system.

Non-Residents normally pay a flat rate of 20% on their income earned in Japan, but not from any overseas-generated income. For the purpose of tax, Non-Residents are defined as people who have lived in Japan for less than a year and for whom Japan is not their normal place of residence.

Non-Permanent residents, defined as people who have lived in Japan for less than 5 years, and do not intend to live there permanently, are required to pay tax on all their Japanese income and any overseas-generated income which is brought into Japan.

Permanent Residents, defined as those who have lived in Japan for at least five years or intend to settle there permanently, are required to pay tax on all their income from Japan or overseas.

However, Japan has Double Taxation treaties with more than 50 other countries, including the USA, Canada, Australia and most European countries, which mean that tax paid in one country can be offset against any tax payable in the other.

Other taxes payable in Japan include property taxes and car tax. There are also taxes on goods and services, which are included in the prices shown.

Japan's National Tax Agency has income tax guides for foreigners on its website.