Securities Tax System

1 Dividends from Listed Stocks, etc.

Dividends from listed stocks, etc. (excluding large shareholders) are subject to withholding tax of 15.315% as Income Tax and Special Reconstruction Income Tax (national tax), and 5% as resident tax (local tax), totaling 20.315%.
Since the resident tax for this income has already been specially collected, filing a tax return is not required. However, if you determine that filing is more advantageous, you may also declare it as income (note).
When declaring this dividend as income, it will be subject to comprehensive taxation or separate taxation, and 5% of the resident tax portion withheld by special collection will be deducted from the income tax amount (it will not be deducted from the per capita rate).
Amounts that could not be deducted will be refunded or applied to the per capita levy.
When you choose to file a tax return, please be sure to enter the amount of the 5% special collection resident tax in the section for dividend deduction amounts related to resident tax on the second sheet of the final tax return form.
Dividends from unlisted stocks and large dividends from listed stocks are subject to a 20.42% withholding tax as Income Tax and Special Reconstruction Income Tax. However, this amount only includes Income Tax and does not cover the resident tax portion. Therefore, all dividends for which Income Tax filing was not chosen must be declared for resident tax purposes, regardless of the amount.

2 Capital Gains from Stock Transfers Conducted in a Specific Account with Withholding Tax

For stock transfer income conducted through a specified account with withholding, 15.315% is withheld as Income Tax and Special Reconstruction Income Tax (national tax), and 5% as resident tax (local tax), totaling 20.315% withholding.
Since the resident tax for this income has already been specially collected, filing a tax return is not required. However, if you determine that filing is more advantageous, you may also declare it as income (note).
When reporting capital gains from the transfer of these stocks as income, they will be subject to separate taxation, and 5% of the specially withheld resident tax portion will be deducted from the income tax amount (it will not be deducted from the per capita rate).
Amounts that could not be deducted will be refunded or applied to the per capita levy.
When you choose to file a tax return, be sure to enter the amount of the specially withheld 5% resident tax in the column for the deduction amount of capital gains tax on stocks, etc., related to resident tax on the second sheet of the final tax return form.

Notes：If reported as income, it may be affected by the status of resident tax (such as tax amount or income) when calculating items such as National Health Insurance Tax and Long-Term Care Insurance premiums, and it also impacts non-taxable determinations and dependent determinations.