Whether you are a seasonal worker spending one winter in Niseko, an expat posted to Tokyo, or an investor who has never set foot in Japan, the first question Japanese tax law asks about you is always the same: are you a resident, and if so, which kind? The answer decides what income Japan taxes — everything you earn worldwide, only what arises in Japan, or, for one intermediate category, something in between — and which filing procedures apply. It is worth getting right before any other question is asked.
The three categories of taxpayer
The Income Tax Act divides individuals into residents and non-residents, and then divides residents once more:
| Category & definition | Scope of Japanese taxation | |
|---|---|---|
| Resident (kyojūsha) An individual who has a domicile (jūsho) in Japan, or who has had a residence (kyosho) in Japan continuously for one year or more | Permanent resident (eijūsha) (for tax purposes) A resident other than a non-permanent resident | Worldwide income |
| Non-permanent resident (hi-eijūsha) A resident without Japanese nationality whose periods of domicile or residence in Japan total five years or less within the past ten years | Japan-source income in full; foreign-source income only to the extent paid in Japan or remitted to Japan | |
| Non-resident (hi-kyojūsha) Any individual who is not a resident | Japan-source income only (rent from Japanese property, salary for work performed in Japan, and so on) | |
Two things are worth noticing at once. First, nationality is almost irrelevant: a foreign national living in Japan is simply a resident, taxed like anyone else. It matters only at one point — the non-permanent resident category exists only for those without Japanese nationality. Second, the categories are about tax, not immigration. Your visa type does not decide them, and holding (or not holding) permanent residency as an immigration status is a separate matter entirely.
What “domicile” means — and the presumption rules
Domicile means the base of a person’s life (seikatsu no honkyo), judged from objective facts — where you actually live, your occupation, where your spouse and dependants live, where your assets sit. It is a substance test: no single factor is decisive, and no day-count is written into it.
Precisely because that judgment is rarely simple, the law supplements it with presumptions. The most important in practice: a person who takes up an occupation that would normally require living in Japan for one year or more is presumed to be a resident — from day one. A typical expat posted to Japan on a two- or three-year assignment is therefore a resident from the day of arrival, and the mirror-image rule applies on leaving Japan for a post abroad.
What each category is taxed on
For a resident other than a non-permanent resident — in this site’s shorthand, a “permanent resident” for tax purposes — Japan taxes worldwide income: the home you sell abroad, the dividends in your home-country brokerage account, the rent from a property in a third country. Relief for double taxation comes afterwards, through the foreign tax credit and treaties.
A non-permanent resident sits in between: Japan-source income is taxed in full, while foreign-source income is taxed only to the extent it is paid in Japan or remitted to Japan (the remittance rule). The category lasts, at most, until your cumulative years in Japan exceed five within the past ten — from that point you are taxed on worldwide income, and obligations such as the Report of Foreign Assets can follow.
A non-resident is taxed only on Japan-source income, frequently through withholding at source — the mechanisms described in our articles on selling Japanese property, payments to non-residents and seasonal work in Niseko — and files through a tax agent (nōzei kanrinin) where a return is required.
Three common misunderstandings
- “I am not Japanese, so Japan cannot tax my overseas income.” Once you are a resident — and after five years, no longer a non-permanent resident — worldwide taxation applies regardless of nationality.
- “My visa decides it.” Residency for tax is judged from living circumstances, not immigration status. You can be a tax resident on a work visa, and a non-resident while holding permanent residency, depending on where the base of your life actually is.
- “Under 183 days means I am not a resident.” Japanese domestic law contains no 183-day residency test. The number comes from the short-term visitor articles of tax treaties, which concern employment income only and carry conditions beyond the day count — as many seasonal workers discover.
Two worked examples
Example 1 (assumptions: a ski instructor arrives in December on a single-winter contract of four months, employed by a Niseko-based company): there is no domicile in Japan and no plan to stay a year or more, so the instructor is a non-resident. Salary for the work performed in Japan is Japan-source income, withheld at 20.42% from the first payday.
Example 2 (assumptions: an engineer without Japanese nationality is posted to Sapporo in 2026 on a three-year assignment, spouse accompanying; no prior years in Japan): under the presumption rules she has a domicile from the day of arrival and is a resident — and, having five years or less in Japan within the past ten, a non-permanent resident. Her Japanese salary is taxed in full; interest earned in her home-country account is taxed in Japan only if paid in or remitted to Japan. If she stays on, the non-permanent category runs out once her cumulative stay exceeds five years, and worldwide taxation follows.
Borderline cases — a departure mid-assignment, a stay that was meant to be short and lengthens, family in one country and work in the other — turn on their facts, and are exactly where advice earns its keep before a filing position is taken.
Not sure which category you fall into?
Tell us your situation in outline — arrival and departure dates, family, work — and we will tell you how Japan classifies you and what follows from it.
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