🇯🇵 COUNTRY A Japan VS 🇦🇺 COUNTRY B Australia

Japan levies two layers of income tax: national income tax (shotoku-zei) at progressive rates of 5–45%, and residence tax (jumin-zei) at a flat 10% charged by your prefecture and municipality. Unlike Australia which has a single federal rate, every Japanese resident pays this flat 10% on top of national tax. At ¥10M income (~$65K USD): national tax ~20%, municipal tax 10% = 30% combined income tax. At ¥20M (~$130K USD): national ~35%, municipal 10% = 45%. At ¥30M (~$200K USD) national ~45%, municipal 10% = 55% combined. The municipal tax is assessed on the prior year’s income and billed in four instalments the following year, creating a significant cash-flow obligation when you first earn high income in Japan.

Japan introduced a departure tax in 2015 for individuals holding financial assets exceeding ¥100 million (approximately $670K USD at current exchange rates). If you leave Japan holding shares, bonds, derivatives, or other qualifying financial assets above this threshold, those assets are treated as sold at market value on your departure date and any unrealised gains are taxed at 15.315% (national) + 5% (local) = approximately 20%. The tax does not apply to real estate, business assets, or life insurance policies. It is designed to prevent high-net-worth individuals from emigrating to avoid Japanese capital gains tax on investment portfolios built up during Japanese residency.

Both systems are compulsory retirement savings vehicles but work very differently. Australia’s superannuation requires employers to contribute 11.5% (rising to 12% by 2025) of ordinary time earnings into a worker’s individual super fund. Earnings inside super are taxed at 15% (concessional rate) and withdrawals after age 60 are tax-free for most people. Japan’s kosei nenkin (employee pension) is a defined-benefit style system where both employer and employee contribute ~9.15% each; the eventual benefit depends on years of contribution and average salary. Australian superannuation provides more individual ownership and investment choice. Japan’s pension provides more predictable government-backed income. For internationally mobile workers, Australia’s super is generally more portable.