Taxes

Taxes when working in Japan

How much do you know about Japan's taxes?

Taxes & Filing
税金・確定申告

Company employees usually don't file themselves — payroll withholding + year-end adjustment cover it. Filing is mainly for side income, medical deductions, home purchase, or freelance work.

  • Income tax: withheld monthly by employer, reconciled at year-end
  • Resident tax: based on prior-year income, deducted monthly from salary starting June
  • Final filing: Feb 16 – Mar 15, can use e-Tax online
  • Medical deduction: annual medical costs over ¥100k can be deducted (keep receipts)
  • Furusato Nozei: donate to municipalities for tax credit + local specialty gifts
💡 With a My Number Card, you can file via e-Tax from home — no queueing at the tax office.
Worldwide Income Tax
全球纳税・海外收入

Japan classifies tax residents by the 5-out-of-10-years rule. If you've lived here more than 5 years in the past 10, you become a 'permanent resident' for tax purposes (separate from visa status) and must report worldwide income.

  • Status is decided by physical residency time — visa type doesn't matter
  • Non-permanent resident (≤5 yrs): taxed on Japan-source income + foreign income remitted to Japan
  • Permanent resident for tax (>5 yrs): all worldwide income reportable
  • Foreign taxes already paid can be offset via Foreign Tax Credit — no double taxation
💡 If you're approaching the 5-year mark with significant foreign assets or income, talk to an accountant ahead of time — it's the most commonly missed 'tax bracket jump'.
Exit Tax (Departure Tax)
国外転出時課税・离日税

Tax residents who've lived in Japan 5+ years (same threshold as tax-status permanent resident) and hold ¥100M+ in eligible securities owe tax on unrealized capital gains when leaving — assets are treated as if sold. Started July 2015.

  • Who: same 5/10-year resident threshold + ¥100M in eligible securities/derivatives
  • What: unrealized gains on stocks, mutual funds, unsettled credit/derivative positions (market value at departure − cost basis)
  • Not covered: real estate, bank deposits, crypto, etc. (as of 2025)
  • 5-year deferral available with collateral + tax representative (extendable to 10 yrs); reversible if you return within 5 yrs still holding the assets
  • A separate 'departure tax return' is required before leaving Japan
💡 The ¥100M threshold sounds high but is easy to cross with tech-sector RSUs or stock options. If you're approaching it, consult a tax accountant at least 6 months before leaving.
Gift Tax (Zoyozei)
贈与税・赠与税

Japan taxes gifts received per person per year at progressive rates. The basic annual exemption is ¥1.1M per recipient — the recipient (not the giver) files and pays. Family gifts count.

  • Exemption: total per recipient per year (Jan–Dec) ≤ ¥1.1M → tax-free
  • Filer: the recipient, Feb 1 – Mar 15 next year
  • Rates: progressive 10–55%
  • Regular living and education expenses between family members aren't gifts (fuyō-gimu / duty of support)
  • Big-ticket exemptions: housing fund (up to ¥10M), lump-sum education (up to ¥15M), spouse residential property (¥20M)
💡 After the 2024 reform, gifts made within 3–7 years before the giver's death are pulled back into the inheritance tax base — the 'trickle ¥1.1M each year' strategy doesn't work in the final years. Long-term planning needed.