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Income Tax in Japan

Find out about the Japanese tax system and who must pay tax on their income in Japan...

Any individual considered a resident, non-permanent resident or non-resident must pay some income tax in Japan. The amount of income tax payable depends on residency status as well as income.

Income tax must be paid at a national, prefectural and municipal level. Japan is divided into 47 prefectures or jurisdictions. The amount of municipal and prefectural tax remains the same across Japan and is sometimes referred to as the "resident tax".

Residency Status

There are three types of residency status in Japan which influence the amount of tax which must be paid:

  1. Non-resident. This is someone who has lived in Japan for less than one year and whose main home is in another country. Non-residents only have to pay income tax on income received in Japan. For more information about non-resident taxation: Click here
  2. Non-permanent resident. This is someone who has lived in Japan for less than five years in the previous decade and does not intend to live there permanently. Non-permanent residents must pay tax on all income received or sent to Japan, but not on income which remains abroad.
  3. Permanent resident. This is someone who has lived in Japan for at least five years or who intends to stay in Japan permanently. Tax must be paid on all income received in Japan or abroad.

There are some exceptions to the above as Japan has agreements with a number of countries which can apply in addition to the criteria stipulated here.

  • For more information about income tax and individual country tax agreements: Click here (PDF)

 

Disclaimer

Any statements concerning taxation are based upon our understanding of current taxation laws and practices in Japan which are subject to change. While every effort has been made to offer information that is current, correct and clearly expressed the publisher is not responsible for the results of actions taken on the basis of information contained in this summary, nor for any errors or omissions. Readers are encouraged to seek professional advice concerning specific matters before making any decision.

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