Japan tax
Special regime for new residents: Non-permanent resident foreign-source income treatment.
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Special regimes for new residents
Special regime
Non-permanent resident foreign-source income treatment
Tax relief
Details
- Who: Resident: domicile or continuous residence in Japan for one year or more
Non-permanent residents are taxed in Japan on Japan-source income and on foreign-source income paid in or remitted to Japan; foreign-source income paid and kept abroad is outside the Japanese tax base. 1 2 3
Taxed on
Income tax on all Japan-source income plus foreign-source income that is paid in Japan or remitted to Japan from abroad, at the progressive national rates of 5% to 45%.
Who it applies to
- Resident: domicile or continuous residence in Japan for one year or more.
- Non-Japanese nationality.
- Domicile or residence in Japan for an aggregate of five years or less within the preceding ten years.
Exclusions
- Japan-source income, including pay for work performed in Japan, is taxed in full.
- Residents who are not non-permanent residents are taxed on worldwide income.
Tax residence
Resident = domicile, or continuous residence of one year or more. Non-permanent resident = non-Japanese national resident for an aggregate of five years or less in the preceding ten years. Based on facts, not visa type.
Visas
No visa grants this treatment; it follows tax residence and nationality.
Other taxes
Consumption tax: standard rate 10% (7.8% national plus 2.2% local) and reduced rate 8% (6.24% national plus 1.76% local). Local inhabitant tax and social insurance are separate.
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Standard rules and foreign-source income
Standard rules
Japan income tax: national progressive scale, reconstruction surtax and inhabitant tax
Progressive rates
Details
- On: Taxable income after deductions, taxed in progressive bands
- Who: Applies to residents
- Limit: ¥1.9M/yr ≈ $12k
National income tax is progressive in seven bands: 5% up to JPY 1,949,000 (≈ $12,300) of taxable income, 10% to JPY 3,299,000, (≈ $20,800) 20% to JPY 6,949,000, (≈ $43,800) 23% to JPY 8,999,000, (≈ $56,800) 33% to JPY 17,999,000, (≈ $114,000) 40% to JPY 39,999,000 (≈ $252,000) and 45% from JPY 40,000,000 (≈ $252,000). Residents other than non-permanent residents are taxed on worldwide income, including foreign-source income; non-permanent residents are taxed on Japan-source income and on foreign-source income paid in or remitted to Japan. A 2.1% reconstruction surtax on the base income tax and a 10% inhabitant tax come on top. 4 5
Taxed on
Taxable income after deductions, taxed in progressive bands (separate-taxation items excluded); inhabitant tax is assessed on the previous year's income.
Who it applies to
- Applies to residents; non-permanent residents are taxed on Japan-source and remitted foreign-source income.
Exclusions
- Income taxed under separate-taxation rules is outside the progressive scale.
- For 2025 onward, where base income exceeds JPY 330 million (≈ $2,080,000), an extra amount is added when 22.5% of the excess is higher than the ordinary income tax and reconstruction surtax.
Limits
- JPY 1,949,000 a year (≈ $12,300) · Upper limit of the 5% national band (taxable income from JPY 1,000 (≈ $6)); quick-table deduction JPY 0.
- JPY 3,299,000 a year (≈ $20,800) · Upper limit of the 10% band (from JPY 1,950,000 (≈ $12,300)); quick-table deduction JPY 97,500 (≈ $610).
- JPY 6,949,000 a year (≈ $43,800) · Upper limit of the 20% band (from JPY 3,300,000 (≈ $20,800)); quick-table deduction JPY 427,500 (≈ $2,700).
- JPY 8,999,000 a year (≈ $56,800) · Upper limit of the 23% band (from JPY 6,950,000 (≈ $43,800)); quick-table deduction JPY 636,000 (≈ $4,010).
- JPY 17,999,000 a year (≈ $114,000) · Upper limit of the 33% band (from JPY 9,000,000 (≈ $56,800)); quick-table deduction JPY 1,536,000 (≈ $9,690).
- JPY 39,999,000 a year (≈ $252,000) · Upper limit of the 40% band (from JPY 18,000,000 (≈ $114,000)); quick-table deduction JPY 2,796,000 (≈ $17,600).
- JPY 40,000,000 a year (≈ $252,000) · The 45% band applies from this taxable income; quick-table deduction JPY 4,796,000 (≈ $30,300).
Tax residence
Resident individuals are domiciled in Japan or have continuous residence of 1 year or more.
Visas
Tax treatment follows residence status for tax, not visa type.
Other taxes
Reconstruction special income tax is 2.1% of the base income tax, filed and paid with income tax; for income arising from 1 January 2027 the reconstruction rate falls to 1.1% and a 1% defence special income tax is withheld alongside. Individual inhabitant tax is 10% of taxable income (4% prefectural plus 6% municipal at standard rates; local governments may set different rates), charged on the previous year's income to persons domiciled in Japan on 1 January, plus per-capita amounts of JPY 1,000 (≈ $6) prefectural and JPY 3,000 (≈ $19) municipal.
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VAT, social security and other taxes
- Consumption tax: standard rate 10% (7.8% national plus 2.2% local) and reduced rate 8% (6.24% national plus 1.76% local). Local inhabitant tax and social insurance are separate.
- Reconstruction special income tax is 2.1% of the base income tax, filed and paid with income tax; for income arising from 1 January 2027 the reconstruction rate falls to 1.1% and a 1% defence special income tax is withheld alongside. Individual inhabitant tax is 10% of taxable income (4% prefectural plus 6% municipal at standard rates; local governments may set different rates), charged on the previous year's income to persons domiciled in Japan on 1 January, plus per-capita amounts of JPY 1,000 (≈ $6) prefectural and JPY 3,000 (≈ $19) municipal.
Questions people ask
Who qualifies for Non-permanent resident foreign-source income treatment?
Resident: domicile or continuous residence in Japan for one year or more. No visa grants this treatment; it follows tax residence and nationality.
How are Digital nomad visa holders taxed in Japan?
No special regime in our records is tied to the Digital nomad visa. The standard rules apply: National income tax is progressive in seven bands: 5% up to JPY 1,949,000 (≈ $12,300) of taxable income, 10% to JPY 3,299,000, (≈ $20,800) 20% to JPY 6,949,000, (≈ $43,800) 23% to JPY 8,999,000, (≈ $56,800) 33% to JPY 17,999,000, (≈ $114,000) 40% to JPY 39,999,000 (≈ $252,000) and 45% from JPY 40,000,000 (≈ $252,000). Residents other than non-permanent residents are taxed on worldwide income, including foreign-source income; non-permanent residents are taxed on Japan-source income and on foreign-source income paid in or remitted to Japan.
≈ USD figures are approximate: daily reference rates from ExchangeRate-API, dated 12 Oct 2026, refreshed when the site is updated.
Sources (5)
Official sources
- 2025 Income Tax and Special Income Tax for Reconstruction Guide, section 1-3 · National Tax Agency Japan · checked 2026-10-10 · published 2025
- Tax on the income of an individual as a non-resident in Japan · National Tax Agency Japan · checked 2026-10-10
- Basic knowledge of Consumption Tax · National Tax Agency Japan · checked 2026-10-10
- No.2260 Income tax rates (as of 1 April 2026) · National Tax Agency Japan · checked 2026-10-10 · published 2026-04-01
- Overview of individual tax system (individual income tax rates and inhabitant tax) · Japan External Trade Organization (JETRO) · checked 2026-10-10