Japan Exit Tax (Kokugai Tenshutsu Zei): The ¥100M Rule
Japan's exit tax (Articles 60-2 to 60-4, Income Tax Act) applies when you: (1) hold financial assets with a combined FMV of ¥100 million or more on departure date, AND (2) have been a Japanese tax resident for 5 or more years in the 10 years preceding departure. Assets in scope: shares (kabushiki), bonds (saiken), investment trust units (tōshi shintaku), derivatives (saki mono), and cryptocurrency. NOT in scope: Japanese real estate (taxed separately on actual sale); business assets; non-financial assets. Calculation: all in-scope assets are treated as sold at FMV on the departure date. The resulting gain is subject to Japanese capital gains tax rates: 20.315% (15% national tax + 5% local tax + 0.315% special reconstruction surtax). Example: ¥200M portfolio with ¥80M in unrealised gains: exit tax = ¥80M × 20.315% = approximately ¥16.25M. Deferral: if you are moving to a tax treaty country and the treaty provides an exit tax deferral or exemption, consult the specific Japan DTA. Japan-USA DTA: limited exit tax treaty relief. Security deposit: you can apply to defer exit tax payment by providing collateral security to the tax authority (NTA — National Tax Agency). Exemption from exit tax: individuals who have been in Japan for less than 5 of the past 10 years; individuals whose total financial assets are below ¥100M; non-permanent residents (those who have been Japanese residents for fewer than 10 years and whose income is not from Japanese sources — complex rules apply).
Jūminhyo Deregistration and Jūsho Tax Residency
Japan's tax residency is based on the concept of jūsho (domicile — the place a person has a home with the intention to permanently remain) and kyoshō (residence — the place where a person actually lives). Japan's municipal resident register (Jūminhyo) maintained by each city, town, or ward office records all residents. On departure: file a Tenshutsu届 (transfer-out notification) at your local municipal office on or before your departure date. This removes you from the Jūminhyo. Tax consequence: once you are no longer registered in the Jūminhyo and have left Japan with no remaining home (jūsho) in Japan, you become a non-resident for Japanese tax purposes. Anti-avoidance: if you retain a Japanese home available to you (owned property, property leased to family), the NTA may argue you still have a Japanese jūsho. Selling or leasing out your Japanese property before departure removes this risk. Nōzei kanrinin (tax representative): for non-residents with Japanese tax obligations after departure (rental income, property sales), you must appoint a nōzei kanrinin (tax agent in Japan). This person (an individual or zeirishi) handles your Japanese tax filings while you are non-resident.
Final Kakutei Shinkoku and Year of Departure
Kakutei shinkoku is Japan's self-assessed income tax return, filed annually for the prior tax year (Japan's tax year runs January 1 to December 31; return due by March 15). In your year of departure: you file a final kakutei shinkoku covering January 1 to your departure date (worldwide income for the resident period). The exit tax calculation (if applicable) is reported on this final return — Form 申告書第一表 plus the exit tax specific schedules. If you depart before December 31: file a 'pre-departure' return before leaving Japan (this is the most common approach — file the return for the current year at your local tax office, then depart). Alternatively, appoint a nōzei kanrinin to file on your behalf after departure (deadline: March 15 of the following year). Final Japanese tax for year of departure: covers employment income, rental income, dividend income, business income for the resident period. Local inhabitant tax (jūminzei): separately assessed by your municipality — paid in 4 instalments in the year following the tax year. The jūminzei for your final year of Japanese residency will be assessed after you have left — ensure your nōzei kanrinin handles this.
Japanese Pension (Nenkin) on Departure
Japan has two main pension systems: (1) Kokumin nenkin (National Pension) — the universal basic pension; all Japan residents (including foreigners) between 20–60 are required to contribute. Monthly contribution: approximately ¥16,980 (2025). Full pension requires 40 years of contributions (¥816,000/year at full entitlement for 2025). (2) Kōsei nenkin (Employees' Pension Insurance) — for company employees; higher contributions but higher pension. On departure from Japan — two options: (a) Lump-sum withdrawal (dattai ikkat shikyū): available to foreign nationals who have left Japan and renounce their Japanese pension rights. Apply within 2 years of departure. Conditions: no Japanese nationality; must have paid Japanese national pension for at least 6 months; must not be residing in Japan; must not be currently receiving Japanese pension. Tax: 20.42% withheld at source on the lump sum. The 6-month minimum is a low bar — even short-term foreign workers can reclaim contributions. (b) Preserve the pension for retirement: if you have sufficient years of contribution (10+ qualifying years to receive a pension), you can leave the pension in Japan and receive it at age 65 internationally. Japan has totalization agreements with many countries (USA, UK, Germany, France, etc.) — years in each system can be combined to meet the minimum 10-year threshold.
Japanese Property and Non-Resident Tax
Japanese real estate (fudōsan) is NOT subject to the exit tax on departure. If you own a Japanese apartment or house: no deemed disposal on departure. As a non-resident selling Japanese property: capital gains on Japanese real estate are taxable in Japan. The gain is subject to Japanese income tax: short-term gains (held <5 years): 39.63%; long-term gains (held ≥5 years): 20.315%. The buyer may withhold 10.21% of the gross sale price as withholding tax under the non-resident source withholding rules (unless an exemption applies). Main residence exemption: Japanese residents who sell their principal home can deduct ¥30 million from the gain — this is NOT available to non-residents. Non-resident rental income from Japanese property: taxable in Japan. File kakutei shinkoku as a non-resident (via nōzei kanrinin). Alternatively, appoint a dairi ninkasha (authorised representative) for rental management and tax compliance. Japanese fixed assets tax (kotei shisan zei): annual property tax levied by municipalities — continues to apply to non-residents who own Japanese property; typically 1.4% of government assessed value.