Fringe Benefits and Tax Issues

• U.S Taxes
• Medical Insurance

U.S. Taxes

The first thing you'll need is the official dollar-yen conversion chart from your local embassy/consulate. You'll need it to complete the Foreign Earned Income Form (#2555). If you spent more than 330 days outside of the US, then you qualify for the Bona Fide Residence Test and are allowed a $74,000 income tax exemption. Even if you end up owing zero to Uncle Sam you still must file your tax forms. If not, you might not be able to get your passport renewed when it expires and you open yourself up to an audit. If you've never had one, you'll find that root canal together with a broken leg is a far more pleasant experience. If you don't qualify for the BFRT than you may still owe nothing thru the Physical Presence Test, in which the number of days you're not in the US divided by 365 gives you what percentage of $74,000 you can be exempt from. If you have stocks/bonds/mutual funds, etc, you'll also have additional forms to fill out (1099-INT, 1099-DIV,etc).

Note also that to be able to count a day as outside the US you must be in or flying over a foreign country, whether it's your destination country or not doesn't matter. Flying over the ocean per se doesn't count. The bureaucrats have made a very lengthy explanation of all this in their tax pamphlets.

Contact the US embassy (033-224-5000) or Osaka Consulate (06-315-5900) for tax advice during the tax season. The embassy has an IRS agent there all year long, and can assist you in getting thru the red-tape, as well as other matters such as absentee ballots (you DO vote, don't you?) and legal questions. British nationals can find info here.

Medical Insurance

Premiums are calculated based on the amount of residential tax and the number of insured people, and vary according to a member's income and place of residence. For example, within the municipality of Tokyo, the amount of per capita levy for an insured person is Yen 19,500/year, and the amount of income-based levy is [the total amount of residential tax of all members of one household x155/100]. People who have not paid residential tax are required to pay only the amount of per capita levy. The maximum premium is Yen 520,000(as of 1996).

On March 7, 1986, the National Insurance Law was revised and foreigners became eligible to apply. Insured persons include those who have a place of residence in special wards or cities, towns, or villages. Accordingly, those who reside in the country for only a short period of time and those who have no certificate of alien registration, such as tourists, are excluded.

On March 31, 1992, eligibility requirements were further clarified and standardized: A person is eligible to join National Health Insurance if they meet the following requirements :

i) They are registered under the terms of the Alien Registration Law
ii) They are admitted to the country to reside in Japan for one year or longer by Immigration. A person who stays in the country for longer than one year without permission is ineligible to be insured. It can be said that as a rule, "non-documented (illegal)" employees are not eligible for National Health Insurance.

Japan has a system of universal health coverage, whereby most of the population is enrolled in some form of health insurance scheme and are thus required to pay insurance premiums. The health insurance system can be broadly classified into employees' health insurance and Kokuho. Employees' health insurance is further subdivided into various types, such as Government-managed Health Insurance for employees of small businesses, Shaho (insurance for employees of large corporations), and mutual aid associations for public employees, teachers, etc. Kokuho applies to farmers, the self-employed, etc. There is also the Health Program for the Elderly, financed by joint contributions from all the above systems. The health insurance system is in principle financed by insurance premiums, but there is also a system of public support whereby benefits, operating expenses, etc, are paid by national and local government. Public funding is supplied depending on the financial state of the system. While little public funding is provided for the Shaho schemes for large corporations, the programs for small company employees and the Kokuho receive more government support. Insurance premiums vary among systems, but the general principle is that employers and employees share equally contributions equivalent to approximately 8.5% of salary in employees' health insurance systems. Kokuho premiums are also determined based on the number of family members and the level of income

Table 1. Outline of national health insurance systems.

System	Persons eligible	Copayment	Additional copayment for prescription drugs
Employee's Health Insurance Health insurance Seaman’s health insurance Mutual aid association	Employees of small businesses Employees of large corporations Day laborers Seamen Employees of national and local government Private school teachers and staff	Insured individual: 20% Family: Inpatient: 20% Outpatient: 30%	Oral drug= 1:Yen0/day 2-3:Yen30/day 4-5:Yen60/day 6 or more:Yen100/day Topical drug 1.        Yen500 2.        Yen100 3.        or Yen150   Tonpuku drug (on demand use) Yen10/drug
Kokuho (retirees’ healthcare system)	Agricultural workers, self-employed, etc Retired former participants in employee insurance	30% Insured individual 20% Inpatient 20% Outpatient 30%
Health Program for the Elderly	Over 70 years (including bedridden patients over 65 years)	Outpatient=5Yen00/consultation/institution (Max. Yen2,000/month) Inpatient=Yen1,100/day(until March 1999)          Yen1,200/day(until March 2000) (Yen500/day for patients with lower income)