Japan Tax Guide for Foreign Residents

First, Check Your Tax Residency Category

Japanese income tax rules depend on your domicile and length of stay — not your nationality or visa type. The Income Tax Act divides individuals into three categories, and the scope of taxable income differs greatly between them.

If you live in Japan and work for a Japanese employer on a work visa, you are a "resident" from the year you arrive. For the fundamentals of the Japanese tax system, see our tax basics guide.

The Main Taxes You Pay in Japan

These are the taxes most foreigners working in Japan will encounter. Some are deducted automatically from your salary (income tax, resident tax); others you pay as you spend (consumption tax).

Health insurance and pension premiums are not taxes, but they are also deducted from your salary (roughly 15% of pay as the employee share). The full amount is deductible from your income as the social insurance premium deduction. Part of your pension contributions can be refunded when you leave Japan (see the lump-sum withdrawal payment).

Company Employees: Withholding and Year-End Adjustment

If you work for a company in Japan, income tax is withheld from every paycheck as an estimate, and in December your employer runs the year-end adjustment (nenmatsu chosei) to settle the exact amount for the year. If your salary comes from one employer only, this usually completes your income tax obligations — most employees in Japan never file a tax return.

See our year-end adjustment guide for how to fill in the forms. If you support family members living abroad, extra documents are required (next section). Around January your employer gives you a gensen choshu hyo (withholding tax certificate) — the official proof of your income and taxes paid. Keep it: you will need it for visa renewals, permanent residency applications, and loans.

The Final Tax Return (Kakutei Shinkoku): Who Files and How

The final tax return is the procedure where you calculate your own income and tax for the calendar year (January 1 – December 31) and report it to the tax office. Filing and payment run from February 16 to March 15 of the following year (extended to the next weekday if it falls on a weekend).

You must file if any of these apply

• You are a freelancer or run your own business (tax returns for sole proprietors)
• You are an employee with side income over 200,000 yen a year (side jobs and taxes)
• You receive salaries from two or more employers
• Your salary exceeds 20 million yen a year (year-end adjustment does not apply)
• You left your job mid-year and were not re-employed by December
• You are a non-permanent or permanent resident who must report foreign income (dividends, rent, etc.)

Filing is worth it (you get money back) if

• Your family's medical bills exceeded 100,000 yen in the year (medical expense deduction)
• You donated via Furusato Nozei hometown tax (Furusato Nozei guide)
• You bought a home with a mortgage (first year of the housing loan credit)
• You left Japan or your job mid-year and your withholding was never settled

How to file with e-Tax

We explain each screen in how to file with e-Tax, and you can double-check everything with the tax return checklist. The NTA publishes an English "Income Tax Guide" every year, and some tax offices offer consultations with interpreters during the filing season. The return-preparation website itself is in Japanese, but it does all calculations automatically.

Deductions and Rules Specific to Foreigners

1. Dependents living abroad (family back home)

If you financially support family members in your home country, you may claim the dependent deduction (380,000–630,000 yen deducted from income per dependent) — but since 2023, relatives abroad aged 30 to 69 are excluded in principle. They only qualify in the following cases.

2. Tax treaty relief

Japan has tax treaties with many countries that prevent double taxation and, in some cases, exempt the earnings of students, trainees, professors and researchers. To claim treaty benefits on salary, you generally file an "Application Form for Income Tax Convention" through your employer before payment. Treaty terms differ by country — check the treaty between Japan and your home country on the NTA website.

3. Foreign tax credit (avoiding double taxation)

If you are taxed in Japan on worldwide income and also paid tax abroad on the same income, the foreign tax credit lets you subtract a calculated amount from your Japanese income tax. You claim it on your final tax return.

Leaving Japan: Settle Your Taxes Before You Go

If you leave Japan partway through the year and become a non-resident, your taxes need to be settled. Missing these steps can mean losing refunds you are entitled to — or receiving unexpected bills after you have left.

Pre-departure checklist

• Income tax settlement: employees get a final year-end adjustment from their employer at departure; others file a tax return before leaving (or appoint a tax agent and file the next year)
• Appoint a tax agent (nozei kanrinin): notify the tax office of a person or company in Japan who will file, pay and receive refunds on your behalf after you leave
• Resident tax settlement: if you lived in Japan on January 1, the full year's resident tax is due even if you leave. Ask your employer to deduct it in a lump sum from your final pay, or pay via your tax agent
• Prepare the pension lump-sum claim: with 6 months or more of pension contributions, you can claim within 2 years of departure

Pension lump-sum withdrawal and the tax refund

Foreign nationals who paid into the employees' or national pension for 6 months or more can claim the lump-sum withdrawal payment (dattai ichijikin) after leaving Japan. The payment is currently capped at 5 years (60 months) of contributions; a 2025 pension reform will raise the cap to 8 years, but the start date has not been set.

The employees' pension portion is paid with 20.42% income tax withheld — but if you appointed a tax agent before departure, the agent can file a refund claim (electing retirement income taxation), and most of the withheld tax is typically refunded. The flow looks like this:

If you will still own assets in Japan after leaving, see inheritance tax for foreigners and Japanese real estate and taxes for foreigners.

Key Points for the Wealthy and Investors

Moving to Japan with substantial assets raises issues beyond ordinary employment taxes.

• The non-permanent resident 5-year rule: for your first 5 cumulative years, overseas investment income is in principle not taxed unless remitted to Japan
• Exit tax: unrealized gains on covered assets of 100 million yen+ are taxed when you leave Japan — but years on work-category visas do not count toward the residency test
• Inheritance and gift tax exceptions: if a foreigner living in Japan on a work-category visa passes away, overseas assets are in principle outside Japanese inheritance tax
• Asset reporting: after 5 years of residence you fall under the Overseas Assets Report (over 50 million yen abroad) and CRS automatic exchange of account information
• For entrepreneurs: the Business Manager visa was tightened from October 16, 2025 — capital of 30 million yen or more, at least one full-time employee, and more

Read the full guide: Japan taxes for wealthy foreigners — covering the exit tax and visa types, the Financial/Asset Management Special Zones, and how foreign-owned companies can use subsidies.