Japan is one of the world’s safest and most technologically advanced countries. From the neon lights of Tokyo to the historic charm of Kyoto, expats in Japan enjoy a high quality of life, world-class infrastructure, and a vibrant cultural scene.
In this guide, we’ll walk you through everything you need to know about relocating to Japan from a personal tax perspective, including tax residency, income tax, special tax regimes and tax return obligations.
TaxPilot recommend that you organize your affairs in good time to get ahead and make the most of favorable tax treatment while making sure you’re meeting your tax return obligations.
Japan follows a residence taxation model. If you are resident, you will pay tax worldwide incomes. If you are non-resident, you will pay tax on local incomes only.
if you spend more than 365 consecutive days in Japan.
if you have a Japanese domicile.
Providing you are considered a non-permanent resident, foreign incomes and gains will be exempt from taxation in Japan providing that the foreign incomes and gains are not remitted to Japan. Japan can be a very tax efficient place to live for expats and nomads and as such, Global Tax Consulting recommends seeking personalized tax planning advice to take advantage of the special tax regime.
Exempt from Japanese taxation.
Must be a non-permanent resident.
Tax on property and share sales
Tax on value of owned assets
Tax on assets passed to heirs
Tax to contribute to state welfare
If you receive incomes overseas while you are living in Japan, you may find the source country, as a starting point, continues to tax the income which may cause double taxation unless you are using special tax regime.
Double taxation agreements can be used to mitigate double taxation and receive tax free income. As such, the more double taxation agreements a country has, the better, as agreements will ensure you’re not taxed twice and even better, ensure your income is tax free.
At present, Japan has 92 double taxation agreements signed.
