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Japan · Tax System

Corporate tax, VAT/GST, personal income tax, capital gains, and filing obligations.

AI-drafted, editorially reviewed. Confirm specifics with the official authority.

When this country treats you as a tax resident

Domicile or 1-year continuous abode = resident. Non-Japanese present <5 of past 10 yrs = non-permanent (foreign income partly exempt).

Primary test
Composite test
Day threshold
No day-count test

How days are counted: Domicile OR continuous abode 1 year + 5-of-10 rule splits permanent / non-permanent (183 days is a treaty short-stay rule, not this test)

Also makes you resident

  • Non-permanent: foreign income taxed only when remitted to Japan
  • Permanent: worldwide income

Tax authority: nta.go.jp

Tax residency is decided separately from immigration status — these tests can make you a tax resident whatever visa you hold, and leaving a visa behind does not by itself end them.

Count your days against this rule Compare residency tests across countries

Japan levies national income tax (National Tax Agency) plus local inhabitant tax, and a consumption tax on most goods and services. Residents are taxed on worldwide income, with distinct rules for non-permanent residents.

Taxes are administered by the National Tax Agency (NTA). Companies pay national corporate tax plus local corporate taxes, and consumption tax applies to most goods and services.

  • The national corporate tax rate is 23.2%; combined with local taxes the effective rate is higher.
  • The consumption tax (VAT-equivalent) standard rate is 10%, with a reduced 8% rate for some items.
  • Filing and payment are handled through the NTA's e-Tax system.

  1. 1

    Determine your residency category

    Japan taxes by residency: non-permanent residents, permanent residents and non-residents are taxed differently; permanent residents are taxed on worldwide income.

  2. 2

    Register with the tax and municipal offices

    You are registered through your municipality (resident tax) and the tax office (national income tax); employees are set up by their employer.

  3. 3

    Understand the taxes that apply

    Identify national income tax, local inhabitant (resident) tax, consumption tax (business), and social-insurance contributions.

  4. 4

    Have tax withheld and year-end adjusted

    Employers withhold income tax monthly and perform a year-end adjustment (nenmatsu chōsei); many employees then need no return.

  5. 5

    File a return if required

    File a final income tax return (kakutei shinkoku) between mid-February and mid-March if you have other income or are not fully adjusted at source.

  6. 6

    Pay, keep records and get advice

    Pay any balance, keep records, and get advice for foreign income and the resident-tax timing.

  • Residency category determined (non-permanent/permanent/non-resident)
  • Municipal + tax-office registration
  • Applicable taxes identified (income tax, inhabitant tax, consumption tax, social insurance)
  • Monthly withholding + year-end adjustment
  • Final return (kakutei shinkoku) if required
  • Foreign-income treatment checked
  • Records kept
  • Advice for resident-tax timing/foreign income

Frequently asked questions

What is inhabitant tax?

A local (prefectural and municipal) tax on the prior year's income, billed separately from national income tax and typically around 10%.

Are foreigners taxed on foreign income?

Non-permanent residents (broadly, under five years) are generally taxed on Japan-source income plus foreign income remitted to Japan; longer-term residents are taxed on worldwide income.

What is the consumption tax?

Japan's consumption tax is a VAT-style tax applied to most goods and services at the standard rate (10%).

Government portals

This topic in other countries

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