For individuals from abroad, tax obligations for income tax in Japan depend on residency status, which is categorized as follows:
Residency Categories
- Residents (other than non-permanent residents)
- Non-permanent residents
- Non-residents
An individual who has a “Jusho” (domicile) or has continuously maintained a “Kyosho” (residence) in Japan for one year or more is classified as a resident.
Among residents, an individual of non-Japanese nationality who has lived in Japan for a total period of five years or less within the last ten years is classified as a non-permanent resident(→taxable income).
Anyone who does not meet the requirements for residency is classified as a non-resident(→taxable income).
For example, if you are from the UK and have been living in company housing in Japan for two years, you are considered a non-permanent resident.
Scope of Taxable Income
Your taxable income is determined based on your residency status as described above.
Classification Income other than Foreign Source income Foreign Source Income Paid in Japan Paid Abroad Resident Resident other than non-permanent resident Taxable Non^permanent resident Taxable Only the portion deemed remitted to Japan is taxable
Classification Domestic Source Income Income other than Domestic Source Income Non-resident Taxable in principle Not Taxable
- Residents (other than non-permanent residents) are required to pay income tax on their worldwide income.
- Non-permanent residents are required to pay income tax on their income other than foreign-source income, foreign-source income paid in Japan, and foreign-source income paid abroad but remitted to Japan. The amount remitted to Japan includes any amount received from abroad in excess of non-foreign-source income paid abroad during the year(→definition).
Example: If, as a non-permanent resident, you remit and receive 210 from abroad to Japan, of which 200 is non-foreign-source income paid abroad, then the remaining 10 (210 – 200) is considered foreign-source income remitted to Japan and is taxed accordingly.
＊Amount Remitted: 210
| Type of Income | Paid in Japan | Paid Abroad |
| Non-Foreign-Source Income | 500 | 200 |
| Foreign Source Income | 150 | 50 |
3. Non-residents are required to pay income tax only on Japan-sourced income(→definition).
What Is “Non-Foreign-Source Income”?
The National Tax Agency (NTA) website provides details on what qualifies as “non-foreign-source income.” In general, income generated from activities or assets within Japan is considered non-foreign-source income. For example, if you work remotely in Japan for a UK company, your income is classified as non-foreign-source income, regardless of whether your work is for an international or domestic purpose.
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