Japan has tax treaties with over 70 countries. But whether that means you can stop filing taxes in your home country depends entirely on which country you’re from.
The Golden Rule: It Depends on Your Home Country
Japan taxes you on income earned in Japan once you become a resident. But your home country may still claim the right to tax your worldwide income — regardless of where you live.
US Citizens and Green Card Holders — Always File
The US is almost unique in taxing its citizens on worldwide income regardless of residence.
If you’re a US citizen or permanent resident living in Japan, you must:
- File a US federal tax return every year (even if you owe nothing)
- File FBAR (FinCEN 114) if your foreign financial accounts exceed $10,000 at any point during the year
- Report foreign financial assets on Form 8938 if they exceed $200,000 (single) / $400,000 (married)
The US-Japan Tax Treaty reduces or eliminates double taxation through:
- Foreign Earned Income Exclusion (FEIE): Up to ~$120,000 (2024 limit, indexed annually) of foreign earned income excluded from US tax
- Foreign Tax Credit (FTC): Credit for Japanese taxes paid, reducing or eliminating your US tax bill
In practice: Most US citizens in Japan owe little or nothing to the IRS after applying FEIE or FTC. But you must still file every year.
Key US Tax Obligations
| Obligation | Threshold | Form |
|---|---|---|
| Federal Tax Return | Any income | 1040 |
| FBAR | >$10,000 in foreign accounts | FinCEN 114 |
| FATCA | >$200,000 in foreign assets | Form 8938 |
| Self-employment | Any self-employment income | Schedule SE |
UK Citizens — Usually Not Required to File
The UK does not tax non-residents on foreign-source income. If you’ve genuinely moved to Japan (not just temporarily):
- You become non-resident for UK tax purposes (usually after leaving the UK and meeting the Statutory Residence Test conditions)
- UK source income (rental income, UK pensions, etc.) may still be taxed by HMRC
- Japanese employment income: not taxed by HMRC for non-residents
Check: Complete the HMRC Statutory Residence Test (SRT) to confirm your status. If you visit the UK too frequently, you may remain UK tax resident.
Australian Citizens
Similar to the UK — Australia taxes residents, not citizens. Once you’re a genuine non-resident for tax purposes:
- Australian-sourced income (rental, dividends, etc.) may still be taxed
- Japanese employment income: not taxed by the ATO for non-residents
File a Non-Resident Australian Tax Return if you have Australian-source income. Otherwise, you generally don’t need to file once non-resident status is established.
Canadian Citizens
Canada uses a residency-based system. After establishing yourself as a non-resident for Canadian tax purposes:
- File a “departure return” for your final year of Canadian residency
- Ongoing: only Canadian-source income (rental, pensions, etc.) is taxed by CRA
- Japan employment income: not taxed by Canada
Deemed disposition: When you leave Canada, you’re considered to have sold most of your assets at market value for tax purposes. Plan ahead.
Other Countries
Most European countries (Germany, France, Netherlands, etc.) use residency-based taxation. Once you’re resident in Japan, you typically stop being taxed on Japanese income by your home country — though home-country source income may still be taxable.
Check your specific country’s rules — and especially whether your country requires you to formally notify tax authorities when you leave. Some do; some don’t.
Japan’s Taxes for Foreign Residents
Living in Japan, you’ll pay:
- Income tax (所得税): 5–45% progressive, withheld by employer
- Resident tax (住民税): ~10% of previous year’s income, paid to municipality
- Social insurance: Health insurance + pension (~15% of gross salary)
See filing taxes in Japan as a foreigner for the full breakdown.
Do You Need a Tax Advisor?
If you’re:
- A US citizen (yes, always — the rules are complex)
- Self-employed in Japan
- Earning income from multiple countries
- Have significant assets (investments, property) in your home country
…then yes, a qualified international tax advisor is worth the cost.
Look for CPAs or tax advisors who specialize in US expat taxes (for US citizens) or Japan-expat taxation generally. Several firms operate specifically in this space in Tokyo.