Japan income tax return (kakutei shinkoku) deadline: 15 March. Japan has four residency categories: permanent resident, non-permanent resident (under 5 years), and non-resident — each with different worldwide income obligations. National rates 5–45% plus local inhabitant tax ~10%. Companies run year-end adjustment (nenmatsu chosei) for employees — most employees don't file. Key expat issue: Japan's 10-year exit rule for inheritance tax.
At a glance
Key Facts
Tax Year
Calendar year: 1 January to 31 December
Filing Deadline
15 March (national income tax); local tax is automatically assessed based on the national return
National Tax Rates
5%/10%/20%/23%/33%/40%/45% progressive; plus 2.1% Reconstruction Special Income Tax surtax (through 2037)
Local Inhabitant Tax
Approximately 10% flat on prior year's taxable income — assessed in the following year based on national return
Residency for Tax
Permanent resident (5+ years): worldwide income taxable. Non-permanent resident (<5 years): only Japan-source + Japan-remitted foreign income
Introduction
Japan's tax return — kakutei shinkoku (確定申告) — is filed for the calendar year and submitted to the local tax office (zeimusho). Most salaried employees in Japan do not file: their employers run a year-end tax adjustment (nenmatsu chosei) that recalculates and settles income tax, eliminating the individual filing requirement. Expats, however, more often need to file: foreign income, multiple income sources, self-employment, and special deductions all require individual filings.
Japan's tax system has particular complexity for long-term residents and high-net-worth individuals: the inheritance tax applies with a 10-year lookback after departure, and residency status affects how foreign income is treated. This guide covers the four residency categories, when to file, key deductions, and the Japan-specific issues expats most frequently encounter.
Section 01
Japan's Four Residency Categories
Japan's residency categories for tax purposes are more granular than most countries:
1. Permanent Resident (永住者 — Eijusha)
Has a permanent home (jusho) in Japan and has lived in Japan for 5+ cumulative years in the past 10 years. Taxed on worldwide income — all foreign income must be declared, even if kept abroad.
2. Non-Permanent Resident (非永住者 — Hi-Eijusha)
Has a permanent home in Japan but has been resident for less than 5 years in the past 10 years. This covers most newly arrived expats. Taxed on: all Japan-source income; foreign-source income only if it is remitted to (received in) Japan. Foreign income kept outside Japan is not taxed — a significant benefit for expats with substantial foreign investment portfolios in the early years of Japan residency.
3. Non-Resident (非居住者 — Hi-Kyojusha)
Does not have a domicile or habitual abode in Japan (present less than 1 year). Taxed only on Japan-source income — typically through withholding at source (20.42% on Japan dividends and interest for non-residents).
4. Resident Without Permanent Home
Rarely relevant — covers specific government officials and similar. For most expats: determine whether you are non-permanent resident (under 5 years) or permanent resident (over 5 years). This determination affects hundreds of thousands of yen in potential tax on foreign investment income.
Section 02
Who Must File Kakutei Shinkoku
Most salaried employees in Japan do NOT file an individual return — their employer handles nenmatsu chosei. You must file if:
You have employment income from multiple sources
Your employment income exceeds ¥20 million
You have self-employment or freelance income above ¥200,000
You have rental income
You have foreign income (if permanent resident, or if non-permanent resident and foreign income remitted to Japan)
You want to claim itemised deductions not available through nenmatsu chosei (e.g., medical expenses above threshold, charitable donations via furusato nozei — hometown tax programme)
You have capital gains from stock trading or real estate
Year-End Adjustment (Nenmatsu Chosei)
For salaried employees whose employer runs nenmatsu chosei: the employer recalculates the employee's annual income tax in December, adjusting for dependants, insurance premiums, and standard deductions. Any over- or under-withheld tax is corrected via the December salary. A certificate (gensen choshu hyo) is issued by January showing total income and tax. Keep this — it is needed for the following year's inhabitant tax assessment and any kakutei shinkoku you do file.
Online Filing: e-Tax
Japan's e-Tax system at etax.nta.go.jp allows online filing. You need a My Number card (マイナンバーカード) and a card reader or the My Number app. The system has English instructions and English-language guidance materials. Many expat tax firms in Japan provide Japanese-language filing services on behalf of clients.
Japan's inheritance tax applies at rates up to 55% — the highest in the world. The lookback rules for expats who leave Japan are particularly stringent and have been tightened in recent years:
Current Rules (from 2019)
A Japanese national or a non-Japanese permanent resident who held a permanent resident visa while living in Japan: Japan applies worldwide inheritance tax for 10 years after departure. Even if the person lives in Dubai and receives inheritance from a US parent, Japan may claim tax on the inheritance for 10 years post-departure.
Planning Implications
High-net-worth individuals and business owners should plan their departure from Japan carefully: (1) Exit at least 10 years before expected inheritance events (not always possible); (2) Consider renouncing Japanese permanent residency before becoming subject to worldwide IHT; (3) Seek specialist advice on the interaction with the country of new residence's inheritance tax treaties — Japan has a limited number of inheritance tax treaties; (4) Structure assets in advance of departure to minimise Japan-situs assets. The 10-year lookback is one of the most significant — and least understood — expat tax issues globally.
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Do I need to file a Japanese tax return as a salaried employee?
Most salaried employees in Japan do not need to file a kakutei shinkoku — their employer handles the year-end adjustment (nenmatsu chosei) which recalculates and settles their income tax. However, you must file individually if: you have employment income above ¥20 million; you have income from multiple employers; you have additional income (rental, freelance) above ¥200,000; you want to claim medical expense deductions, earthquake insurance deductions, or furusato nozei deductions. Expats often need to file individually because of foreign income. Even if filing is not mandatory, it can be beneficial to claim medical expense deductions (actual costs above ¥100,000 or 5% of income), earthquake insurance premiums, and certain charitable donations.
Q
How does Japan tax foreign income for expats?
It depends on your residency status. Non-permanent residents (less than 5 cumulative years of Japan residency in the past 10 years): only foreign income remitted to Japan is taxable — foreign income kept in foreign bank accounts is not subject to Japanese tax. Permanent residents (5+ years): all worldwide foreign income is taxable in Japan, even if never remitted. Foreign taxes paid are creditable against Japanese national income tax (not inhabitant tax). Example: if you are a non-permanent resident with €50,000 in European investment income kept in a European bank account, Japan does not tax this. If you transfer €20,000 of it to your Japanese account, the €20,000 becomes taxable in Japan. This makes the non-permanent resident status highly valuable for expats with existing foreign wealth — invest and hold abroad, remit only operating expenses.
Q
What is Japanese local inhabitant tax and when is it due?
Local inhabitant tax (住民税 — juuminzei) is levied by your prefecture and municipality at approximately 10% flat on your prior year's taxable income. It is assessed in the following year based on your national income tax return. Key features: you pay 2026 inhabitant tax on your 2025 income — which means newly arrived expats in Japan often have low inhabitant tax in their second year (assessed on partial first-year income). For salaried employees: inhabitant tax is typically withheld from June salary onwards for the following 12 months. For self-employed: paid in four instalments (June, August, October, January). When leaving Japan mid-year: you owe the full year's inhabitant tax assessment from the prior year — pay before departure or designate a tax agent. Non-payment is a common issue for expats who depart abruptly.
Q
What is Japan's furusato nozei (hometown tax) and can expats use it?
Furusato nozei (ふるさと納税) is a government programme allowing residents to make donations to municipalities of their choice in exchange for local products (typically food, sake, crafts) and tax credits. The donation amount (minus ¥2,000) is deducted from your inhabitant tax liability and/or income tax — effectively allowing you to redirect local taxes to municipalities and receive gifts in return. Resident foreigners with Japan income can use furusato nozei — there is no nationality requirement. The limit is based on your income and family situation. For a single person earning ¥5 million/year: approximately ¥61,000 in furusato donations, reducing inhabitant tax by approximately ¥59,000 while receiving goods worth significantly more. Used by hundreds of thousands of expats annually — it's a legitimate and popular tax optimisation strategy.
Q
How does Japan handle My Number (マイナンバー) for foreign residents?
My Number (マイナンバー) is Japan's 12-digit national identification number, assigned to all registered residents regardless of nationality. Foreign residents with a valid residency period (not short-term visitor visas) receive a My Number notice from the municipality upon registering address (jyuminhyo). You need My Number for: tax return filing; opening Japanese bank accounts; employment; social insurance registration. From 2024, my Number cards (physical cards with IC chip) are increasingly required for e-Tax filing and other government services. Expats without a My Number card can still file paper returns or use a registered tax agent to file via e-Tax on their behalf. If you haven't received your My Number notification, contact your local municipal office (shiyakusho/kuyakusho) with your Residence Card — they can issue a replacement notification.
Disclaimer:This guide provides general tax information for educational purposes only. Japan's tax rules — especially residency categories, foreign income treatment, and inheritance tax lookback provisions — are complex and have changed in recent years. Always consult a qualified Japanese tax specialist (zeirishi) before filing.