Guide
Tax in Japan for Foreigners: Income Tax, Residence Tax & Filing Your Return
Last updated: March 2026 · Based on NTA official sources
Japan's tax system can feel overwhelming, especially when the forms are in Japanese. But for most foreigners, taxes are simpler than you think — your employer handles most of it. This guide explains what you owe, when you need to file yourself, and how to do it.
Do I need to file a tax return?
If you're a regular employee at one company and earned under ¥20 million, your employer handles your tax through Year-End Adjustment (年末調整). You do not need to file a separate return. Read on to learn when you do need to file.
Tax Residency Status
Your tax obligations depend on your residency status, which is based on how long you've lived in Japan — not your visa type.
| Status | Time in Japan | What's Taxed |
|---|---|---|
| Non-Resident | Less than 1 year | Japan-sourced income only (flat 20.42%) |
| Non-Permanent Resident | 1-5 years (without domicile intent) | Japan-sourced + foreign income remitted to Japan |
| Permanent Resident (tax) | 5+ years or domicile intent | Worldwide income |
Tax residency ≠ Permanent Residence visa
"Permanent resident" for tax purposes is determined by the National Tax Agency (NTA) based on years of residence and intent to stay. It is completely separate from the immigration PR visa.
Income Tax (所得税)
Japan uses a progressive income tax system. These rates apply to your taxable income (after deductions).
| Taxable Income | Tax Rate | Deduction |
|---|---|---|
| Up to ¥1,950,000 | 5% | ¥0 |
| ¥1,950,001 - ¥3,300,000 | 10% | ¥97,500 |
| ¥3,300,001 - ¥6,950,000 | 20% | ¥427,500 |
| ¥6,950,001 - ¥9,000,000 | 23% | ¥636,000 |
| ¥9,000,001 - ¥18,000,000 | 33% | ¥1,536,000 |
| ¥18,000,001 - ¥40,000,000 | 40% | ¥2,796,000 |
| Over ¥40,000,000 | 45% | ¥4,796,000 |
Plus a 2.1% surtax on your income tax (Reconstruction Special Tax, 復興特別所得税) until 2037, bringing the effective top rate to about 45.945%.
Residence Tax (住民税)
Residence tax is a local tax paid to your city/ward based on your income from the previous year. The standard rate is approximately 10% of taxable income (6% prefectural + 4% municipal), plus a flat amount of around ¥5,000.
First year in Japan? No residence tax.
Since residence tax is based on the previous year's income, you typically pay no residence tax in your first calendar year in Japan. But be prepared: in your second year, you'll start paying residence tax on top of income tax — your take-home pay will drop.
How It's Collected
- Employees: Deducted from salary in 12 installments (June to May) — called Special Collection (特別徴収)
- Self-employed / freelancers: Paid in 4 installments (June, August, October, January) — called Ordinary Collection (普通徴収). You'll receive payment slips by mail.
Year-End Adjustment (年末調整)
Every December, your employer calculates your final tax for the year, applies deductions, and adjusts the withholding. This is called Nenmatsu Chosei (年末調整). You'll be asked to fill out forms (usually in October-November) declaring:
- Dependents (扶養控除等申告書)
- Insurance premiums (保険料控除申告書) — life insurance, earthquake insurance
- Mortgage deduction (住宅借入金等特別控除) — second year onward
If you're an employee at one company and have no other income, this is usually all you need. No separate tax return required.
When You Need to File a Tax Return (確定申告)
You must file a Kakutei Shinkoku (確定申告) if any of these apply:
Annual income over ¥20 million
Year-end adjustment does not apply
Side income over ¥200,000/year
Freelance work, rental income, crypto gains, etc.
Income from two or more employers
Only one employer can do year-end adjustment
Self-employed or freelance (個人事業主)
No employer to withhold taxes for you
First year of mortgage deduction (住宅ローン控除)
Must file yourself the first year; employer handles it from year 2
High medical expenses (over ¥100,000/year)
File to claim the medical expense deduction (医療費控除)
Leaving Japan permanently
Must file a final return before departure (see below)
Filing Period & How to File
Deadline: March 15
Tax returns for the previous year (Jan 1 - Dec 31) must be filed between February 16 and March 15. Late filing incurs penalties and interest.
Three Ways to File
1. e-Tax (Online)
File from home using the NTA's e-Tax system. You'll need a My Number Card with an IC card reader or smartphone (NFC-enabled). The interface has English support for some forms. This is the fastest and most convenient method.
2. Paper Filing by Mail
Download forms from the NTA website, fill them out, and mail to your local tax office (税務署). Slower but no tech requirements.
3. Visit the Tax Office
Go to your local tax office in person. During filing season (Feb 16 - Mar 15), temporary filing centers are set up with staff who can help — but expect long waits and limited English support. Bring all documents and your My Number Card.
Common Deductions for Foreigners
| Deduction | Amount | Notes |
|---|---|---|
| Basic (基礎控除) | ¥480,000 | Everyone gets this (income under ¥24M) |
| Employment Income (給与所得控除) | ¥550,000 - ¥1,950,000 | Automatic for salary earners; scales with income |
| Social Insurance (社会保険料控除) | Actual amount paid | Health insurance + pension premiums (fully deductible) |
| Spouse (配偶者控除) | Up to ¥380,000 | If spouse earns under ¥1.03M; spouse can be overseas |
| Dependents (扶養控除) | ¥380,000 - ¥630,000 per person | Family members overseas qualify with proof of remittance |
| Medical Expenses (医療費控除) | Amount over ¥100,000 | Total family medical costs; keep receipts |
| iDeCo (個人型確定拠出年金) | Up to ¥276,000/year | Private pension contributions; fully deductible |
| Hometown Tax (ふるさと納税) | Varies | Donate to local governments; receive gifts + tax credit. Very popular. |
Overseas dependents: rules tightened in 2023
To claim deductions for family members abroad (age 16-29 or 70+), you must provide proof of remittance (¥380,000+ per person per year) and relationship documents. Family members aged 30-69 overseas generally no longer qualify unless they are students or have a disability.
Leaving Japan: Final Tax Return
If you're leaving Japan permanently, you have tax obligations to handle before you leave:
Appoint a Tax Agent (納税管理人)
File a notification at your tax office before departure. This person (friend, employer, or tax professional) handles filings and payments on your behalf after you leave.
File your final income tax return
Either file before you leave (for income earned Jan 1 to departure date) or have your tax agent file by March 15 of the following year.
Settle residence tax
Residence tax for your final year is calculated after Jan 1 of the next year. Your tax agent receives the bills and pays from your designated account, or you can pay the remaining balance in a lump sum before leaving.
Claim pension lump-sum withdrawal
If you contributed to Japanese pension, you can claim a lump-sum withdrawal after leaving. Note: 20.42% tax is withheld but can be partially refunded via your tax agent.
Don't skip the tax agent
If you leave Japan without appointing a tax agent and have outstanding tax obligations, you may face penalties and it could affect future visa applications. It's a simple form — take 10 minutes to do it before you leave.
Furusato Nozei (ふるさと納税) — Japan's Popular Tax Hack
Furusato Nozei lets you "donate" to local governments in exchange for regional gifts (wagyu beef, rice, fruit, etc.) while getting a tax credit for the donated amount minus ¥2,000. It's essentially free gifts in exchange for redirecting your tax payments.
How It Works
- Calculate your donation limit (based on income and deductions — use an online calculator)
- Choose gifts from sites like Furusato Choice, Rakuten Furusato Nozei, or Satofull
- Make the donation (credit card accepted)
- Either use the One-Stop Exception (5 municipalities or fewer, no tax return needed) or declare on your tax return
Foreigners are fully eligible as long as you pay residence tax in Japan. It's one of the few completely legal tax optimization strategies available to everyone.
Tax Treaties
Japan has tax treaties with over 70 countries to prevent double taxation. If your home country has a treaty with Japan, you may be eligible for:
- Reduced withholding tax on dividends, interest, or royalties
- Exemption from Japanese tax on certain income types (e.g., students, researchers)
- Credits for taxes paid in Japan against your home country liability
Check the NTA's list of tax treaties and consult a tax professional if you have significant income in both countries.
Useful Resources
- National Tax Agency (NTA) — English — Official tax information and e-Tax portal
- Kakutei Shinkoku Filing Guide — NTA's official filing instructions (Japanese)
- Withholding Tax Guide for Foreigners — NTA's guide for non-residents (English)
Disclaimer: This guide provides general information about the Japanese tax system for educational purposes. Tax situations vary by individual. For complex situations (dual income, significant overseas assets, stock options), consulting a licensed tax accountant (税理士) is recommended. This is not legal or tax advice.
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