Japan has some of the highest personal tax rates in Asia, with a top combined rate of about 56%. But for your first five years, it doesn't tax most of your foreign income unless you bring it into Japan. That's the non-permanent resident rule, and it applies automatically to most foreign nationals who move there.
This guide covers Japanese personal tax for people moving to or living in Japan in the 2026 tax year, which runs from 1 January to 31 December 2026.
The key question: how long have you lived in Japan in the last 10 years, and does your foreign income stay abroad?
What's changed: from 2026 the basic deduction rises to ¥620,000 for most incomes (more for lower incomes in 2026 and 2027), and for 2026 and 2027 the minimum employment income deduction rises to ¥740,000, applied through year-end adjustment. From April 2026 health insurance carries a new child and child-rearing support contribution, and the employee share of employment insurance fell to 0.5%. From 1 January 2027 the 2.1% reconstruction surtax drops to 1.1% and a new 1% defence surtax is added, so the total stays the same. A 20% flat tax on gains from registered crypto assets is now law, but it starts only on 1 January after a new crypto law takes effect, so 2026 gains are still taxed at full rates.
📋 Japan tax at a glance for 2026
Topic | Details |
|---|---|
Tax year | Calendar year (1 January to 31 December 2026) |
Tax system | Worldwide for residents. Non-permanent residents are taxed on foreign income only if it's paid in Japan or sent to Japan |
Top income tax rate | 45% national tax above ¥40 million, plus the 2.1% reconstruction surtax and 10% inhabitant tax (about 56% in total) |
All-in on a US$100k salary | About 32% in Tokyo, including pension, health and employment insurance (¥15.8 million, single, under 40) |
Dividends and share gains | 20.315% on listed shares, funds and bonds |
Crypto gains | Miscellaneous income at full rates in 2026. A 20% flat rate is law but not yet in force |
Social insurance | Employee share about 15% of pay in Tokyo, below the caps (pension 9.15% capped, health 4.925%, plus care from age 40) |
Residence at a glance | Getting in: moderate (no day count; a home, or a job expected to last a year or more, makes you resident from arrival). Leaving: moderate (inhabitant tax follows your 1 January address, a tax agent is needed and an exit tax can apply) |
Double tax treaties | 78 treaties covering 81 countries and regions |
US dollar figures use ¥158 to US$1 (the US Federal Reserve's H.10 rate was ¥158.34 on 9 October 2026).
Non-permanent residents and the remittance basis
Japan splits tax residents into two groups. You're a non-permanent resident if you're not a Japanese national and you've had a home or residence in Japan for five years or less in total over the last 10 years. Everyone else who is resident is taxed on their worldwide income.
Image 1 — your first five years: foreign income taxed only if it comes to Japan
As a non-permanent resident, you're taxed on:
all income from Japan, including your salary for work done in Japan
foreign income paid in Japan
foreign income paid abroad that you send to Japan in the same year
Foreign income paid and kept abroad, such as rent from your old home, isn't taxed.
Money you transfer to Japan is matched first against any Japanese income paid abroad, such as salary paid into an overseas account, then against that year's foreign income.
Shares need care too. Gains on shares and funds you bought before you became a non-permanent resident are foreign income only if they're sold on a foreign market, through a foreign broker or from a foreign account. Gains on securities you bought while a non-permanent resident are taxed wherever you sell them.
The status ends once your time in Japan passes five years in the last 10. Earlier postings count.
👉 National Tax Agency: taxpayers and the scope of taxable income (non-permanent residents)
When you become tax resident in Japan
There's no 183-day test. You're resident if you have a domicile (jusho) in Japan, meaning the centre of your life is there, or if you've lived in Japan continuously for a year or more.
If you arrive for a job that normally needs you in Japan for a year or more, you're presumed to have a domicile from day one. So most people moving for work are resident, and non-permanent residents, from the start.
How you stop being resident
Leave for a job abroad expected to last a year or more and you're presumed to have no domicile in Japan.
Before you leave, either appoint a tax agent in Japan, or file a final return and pay the tax before you depart. Inhabitant tax is charged to everyone with an address in Japan on 1 January, based on the previous year's income. Leave on 2 January and you'll still get a full year's bill.
👉 National Tax Agency: income tax for people leaving Japan
👉 Ministry of Internal Affairs and Communications: individual inhabitant tax (in Japanese)
Income tax rates for 2026
National income tax is charged on one progressive scale. A 2.1% reconstruction surtax is added to the tax, and inhabitant tax adds a flat 10% (6% municipal and 4% prefectural) on the previous year's income.
Japan national income tax rates for 2026
Taxable income | Rate |
|---|---|
Up to ¥1.95 million | 5% |
¥1.95 million to ¥3.3 million | 10% |
¥3.3 million to ¥6.95 million | 20% |
¥6.95 million to ¥9 million | 23% |
¥9 million to ¥18 million | 33% |
¥18 million to ¥40 million | 40% |
Over ¥40 million | 45% |
Source: National Tax Agency, income tax rates (law as at 1 April 2026). Add the 2.1% reconstruction surtax and 10% inhabitant tax.
Employees get an employment income deduction, capped at ¥1.95 million above ¥8.5 million of pay. The basic deduction is ¥620,000 for total income from ¥6.55 million to ¥23.5 million, tapering to nil at ¥25 million. Social insurance is deductible.
Worked example
You're single, under 40, working in Tokyo and earning ¥15.8 million (about US$100k) in 2026.
Your social insurance is about ¥1.6 million. After the employment income deduction and the basic deduction, your taxable income is ¥11,632,000.
National income tax is ¥2,302,560, or ¥2,350,914 with the surtax. Inhabitant tax is about ¥1,185,000, billed the following year.
Your all-in bill is about ¥5.13 million, or 32.5% of your salary (about 22% before social insurance).
👉 National Tax Agency: income tax rates and the reconstruction surtax (in Japanese)
👉 National Tax Agency: the basic deduction for 2026 (in Japanese)
👉 National Tax Agency: the employment income deduction (in Japanese)
Freelancing in Japan
Self-employed profit is taxed on the same scale. If you file a blue return with double-entry books, you get a further deduction of ¥550,000, or ¥650,000 if you file through e-Tax or keep electronic books.
Many professions also pay individual enterprise tax. In Tokyo it's 5% for consultants, designers, lawyers, accountants and similar businesses, on profit above a ¥2.9 million allowance.
You pay your own social insurance. National Pension is a flat ¥17,920 a month for fiscal 2026. National Health Insurance is set by your city. In Shinjuku the 2026 caps add up to ¥960,000 a year under 40, and ¥1.13 million from 40 to 64.
On US$100k of profit, that comes to about 35% all-in, or about 39% with enterprise tax.
👉 National Tax Agency: blue return special deduction (in Japanese)
👉 Tokyo Metropolitan Government: individual enterprise tax (in Japanese)
👉 Shinjuku City: National Health Insurance rates and caps for 2026 (in Japanese)
Crypto, investments and pensions
How is crypto taxed in Japan? In 2026, gains from selling, spending or swapping crypto are miscellaneous income, added to your other income and taxed at up to about 56%. Swapping one crypto for another counts as a sale, and losses can't be set against your salary or other income.
A change is coming. The 2026 tax reform made gains on specified crypto assets, sold through a registered exchange, subject to a separate 20% tax (15% income tax and 5% inhabitant tax), with losses carried forward for three years. It starts on 1 January of the year after the amended Financial Instruments and Exchange Act takes effect. That act was promulgated on 23 July 2026 and takes effect within a year, on a date set by cabinet order. So the 20% rate will start on 1 January 2027 or 1 January 2028. Until then, full rates apply.
Other investments are taxed like this:
Listed shares, funds and bonds: gains and dividends are taxed separately at 20.315% (15.315% national tax including the surtax, plus 5% inhabitant tax).
Foreign pensions: a foreign state pension counts as a public pension. It gets the public pension deduction (about ¥1.63 million on a ¥6.32 million pension) and the rest is taxed on the normal scale.
Wealth: Japan has no wealth tax.
Japan does have an exit tax. If you leave holding ¥100 million or more in securities and similar assets, and you lived in Japan for more than five of the last 10 years, unrealised gains are taxed as if you'd sold. You can defer the tax for five years, or up to 10, if you appoint a tax agent and give security.
Inheritance tax runs from 10% to 55%, with 55% on the part of each heir's share above ¥600 million. Foreign nationals on most work and study visas who have lived in Japan for 10 years or less of the last 15 are "temporary residents", and the National Tax Agency rules can limit the tax to assets in Japan. Check your own position.
👉 National Tax Agency: tax treatment of crypto assets, December 2025 (in Japanese)
👉 National Tax Agency: 2026 changes, including the 20% crypto rate and its start date (in Japanese)
👉 National Tax Agency: tax on gains from listed shares (in Japanese)
👉 National Tax Agency: public pensions, including foreign pensions (in Japanese)
👉 National Tax Agency: exit tax on departure (in Japanese)
👉 National Tax Agency: who pays inheritance tax (in Japanese)
Social security
Employees join the Employees' Pension and health insurance schemes. In Tokyo in 2026, your share is:
Pension: 9.15% (half of 18.3%) on pay up to a standard ¥650,000 a month.
Health insurance: 4.925% (half of 9.85%, from March 2026) on pay up to ¥1.39 million a month, plus 0.81% for long-term care from age 40 to 64.
Child and child-rearing support: 0.115% from April 2026.
Employment insurance: 0.5% for fiscal 2026.
Japan has social security agreements with 24 countries, including the UK, the United States, Germany, France, Australia and India. The agreements with the UK, Korea, China and Italy only stop you paying in both countries; they don't add your pension years together.
Leave after a short time in the pension schemes and you can claim a lump-sum withdrawal payment within two years.
👉 Japan Health Insurance Association: Tokyo contribution table from March 2026 (in Japanese)
👉 Ministry of Health, Labour and Welfare: employment insurance rates for fiscal 2026 (in Japanese)
👉 Japan Pension Service: National Pension premium for fiscal 2026 (in Japanese)
👉 Japan Pension Service: social security agreements in force
👉 Japan Pension Service: lump-sum withdrawal payments
Double tax treaties
Does Japan have double tax treaties? Yes. As of 1 October 2026 the Ministry of Finance counts 78 tax treaties covering 81 countries and regions, or 91 agreements reaching 157 jurisdictions once information exchange and multilateral agreements are included. Partners include the UK, the United States, Singapore, Australia, Germany, France, China, India and South Korea.
👉 Ministry of Finance: Japan's tax treaty network (in Japanese)
👉 Ministry of Finance: list of Japan's tax conventions
The digital nomad visa
Does Japan have a digital nomad visa? Yes, as a "designated activities" status for remote workers.
Income test: ¥10 million or more a year (about US$63,000).
Insurance: private medical cover of at least ¥10 million for your stay.
Nationality: a passport from an eligible country or region.
Length of stay: six months, with no extension. You can come back once six months have passed since you left.
Work: only for foreign employers or clients, not Japanese ones. No residence card is issued. Family can join you.
Six months with no home in Japan normally keeps you non-resident.
👉 Ministry of Foreign Affairs: digital nomad visa requirements
👉 Immigration Services Agency: digital nomad questions and answers
Who is Japan good for?
How does Japan compare for different kinds of mover? Ratings are relative to the 150+ countries TaxPilot covers, based on the 2026 tax year and the all-in cost including social insurance. They assume ordinary resident status, except Investment income, which counts the non-permanent resident rule for your first five years. If you're a non-permanent resident and keep your pension abroad, the Retirees picture is much better too.
☑️ Who is Japan good for? Tax ratings for expats in 2026
Expat profile | Japan rating | Why |
|---|---|---|
Employees | Poor | About 32% all-in on a US$100k salary (¥15.8 million) in Tokyo: about 22% tax plus about 10% social insurance. Non-permanent resident status doesn't help, because Japanese salary is always taxed. |
Freelancers (self-employed) | Poor | About 35% on US$100k of profit with National Pension and capped health insurance in Shinjuku, or about 39% with 5% enterprise tax. |
Retirees | Moderate | About 22% on a US$40k foreign pension plus US$20k of investment income, including about 9 points of National Health Insurance (about 13% on tax alone). Inheritance tax runs from 10% to 55%, so Poor is arguable. |
Crypto gains | Poor | About 32% on a US$100k gain with no other income, because crypto is taxed as miscellaneous income in 2026. A 20% flat rate for registered crypto assets is law but hasn't started yet. |
Investment income | Moderate | About 15% on a US$1m foreign portfolio as a non-permanent resident: dividends and interest kept abroad aren't taxed, but gains on securities bought after you arrive are taxed at 20.315% (about 10% of the scenario), and National Health Insurance on the declared gain adds about 5% the following year. Once the status ends after five years, dividends and gains are taxed at 20.315%. |
Digital nomad visa | Moderate | A six-month visa for remote workers earning ¥10 million or more a year, about US$5,270 a month, just above our US$5,000 line. It can't be extended. |
Filing and deadlines
Most employees don't file. Your employer withholds tax monthly and settles it at year-end adjustment. You must file if your salary is over ¥20 million, or if your other income is over ¥200,000. For a non-permanent resident, that includes foreign income you sent to Japan.
The 2026 return is filed between 16 February and 15 March 2027. Self-employed people may also have to make income tax prepayments during the year, based on the previous year's tax.
👉 National Tax Agency: the final tax return
👉 National Tax Agency: employees who must file a return
Frequently asked questions
What is a non-permanent resident in Japan?
It's a tax status, not a visa. A tax resident who isn't a Japanese national and has lived in Japan for five years or less in the last 10 is a non-permanent resident, and is taxed on foreign income only if it's paid in Japan or sent there.
Does Japan tax foreign income?
Yes, for most residents. Non-permanent residents are the exception: foreign income paid and kept abroad isn't taxed. Gains on securities bought while a non-permanent resident are taxed wherever you sell them.
How many days make you tax resident in Japan?
There's no day count. You're resident if you have a domicile in Japan or have lived there for a year or more. A job expected to last a year or more makes you resident from the day you arrive.
What are the income tax rates in Japan in 2026?
National income tax runs from 5% to 45%, plus a 2.1% reconstruction surtax on the tax and 10% inhabitant tax. The top combined rate is about 56%.
How is crypto taxed in Japan?
In 2026 crypto gains are miscellaneous income taxed at full rates, and losses can't be set against other income. A 20% flat rate for registered crypto assets is law and will start on 1 January 2027 or 1 January 2028.
Does Japan have a digital nomad visa?
Yes. Remote workers earning ¥10 million or more a year can stay for six months, with medical insurance of at least ¥10 million. It can't be extended.
Where to go next
👉 Hardest countries to stop being tax resident
Important information
This article is general information and does not constitute tax, legal, immigration or financial advice, and does not create a client relationship. Tax outcomes depend on travel history, income sources, treaty status and the law applying to the relevant year. Rates, thresholds and regimes change, and some measures described may be proposed rather than enacted; this article reflects our understanding as at the date of publication. Obtain advice from a suitably qualified professional before acting or refraining from action.
