Japan — Non-Permanent Resident Tax Status

Quick reference

Item	Value
Non-permanent resident	Foreign national resident in Japan for ≤ 5 of the last 10 years
Permanent resident	Resident for > 5 of the last 10 years (or Japanese national)
Non-permanent resident: Japanese income	Fully taxed
Non-permanent resident: Foreign income remitted to Japan	Taxed
Non-permanent resident: Foreign income not remitted	Not taxed
Legislation	Income Tax Act (所得税法), Art. 2; Art. 7
Tax authority	National Tax Agency (NTA) — nta.go.jp

|---|---| | Non-resident | Not resident in Japan | Japan-source income only | | Non-permanent resident | Resident in Japan; foreign national; ≤ 5 years in Japan in last 10 years | Japan-source income + foreign income remitted to Japan | | Permanent resident | Resident in Japan; > 5 years in Japan in last 10 years (or Japanese national) | Worldwide income |

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Becoming resident in Japan

A person is resident in Japan if they have a domicile (生活の本拠) or have resided continuously for 1 year or more (住所).

Foreign nationals on a work visa who live in Japan full-time are generally residents from day one of arrival.

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Non-permanent resident: the tax advantage

During the first 5 years (of the last 10) in Japan, a foreign national is a non-permanent resident and benefits from a partial territorial basis:

• Japanese-source income (salary from Japanese employer, Japan business income, Japan rental income, Japan dividends): fully taxed in Japan
• Foreign-source income paid in Japan or remitted to Japan: taxed in Japan
• Foreign-source income not remitted to Japan: not taxed in Japan

Capital gains on foreign assets (shares, property abroad): not taxed in Japan unless remitted.

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Remittance = taxable

Any foreign income brought into Japan — wire transfers, foreign card transactions in Japan, debt repayment in Japan using foreign income — counts as remittance. Keep foreign and Japanese funds in separate accounts.

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Transition to permanent resident status

After 5 cumulative years of residence in Japan in any 10-year window, the individual becomes a permanent resident for tax purposes and is taxed on worldwide income regardless of remittance.

This is a cliff-edge change: plan carefully around the 5-year mark.

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Japan income tax rates (2025)

Income (JPY)	Rate
Up to 1,950,000	5%
1,950,001 – 3,300,000	10%
3,300,001 – 6,950,000	20%
6,950,001 – 9,000,000	23%
9,000,001 – 18,000,000	33%
18,000,001 – 40,000,000	40%
Above 40,000,000	45%

Plus 10% Resident Tax (municipal/prefectural) and 2.1% surtax. Effective combined top rate: ~55%.

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Sources

• Income Tax Act (所得税法), Art. 2 (definitions), Art. 7 (scope of taxation)
• NTA: nta.go.jp/taxes/shiraberu/taxanswer/shotoku/1920.htm

Working paper only. The non-permanent resident status resets with breaks in Japanese residency — careful tracking of the 10-year lookback window is required. Have a qualified Japanese tax accountant (税理士) review.