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Japan Non-Resident Tax in 2023

Japanese taxes are classified into the following categories: National Taxes - paid to the national government. Local Taxes - paid to the prefectural or municipal government. Japan has property, consumption, personal and corporate income, automobile taxes, etc.

Types of Taxes in Japan

Residents: People with a registered address (domicile) in Japan or who've had a residence in Japan until the present for over a year. Non-Permanent Residents: Japanese residents (as defined above) who've lived in Japan for five years or less and don't have Japanese nationality.

Who Pays Taxes in Japan?

Non-Residents: People who've lived in Japan for less than a year and don't have a registered address or residence in Japan.

Who Pays Taxes in Japan?

• Residents are taxed on their worldwide income. • Non-permanent residents are taxed on their locally-sourced income. Their foreign-earned income is taxed if paid within or remitted to Japan. • Non-residents are taxed only on their locally-sourced income, such as salary, wages, and other types of income.

Scope of Personal Taxable Income

Filing a tax return in Japan is a combination of the following systems: • Self-Assessment: A person determines their tax liability/amount by filing a tax return. • Withholding Income Tax: The employer subtracts the taxes from the employee's employment income (salary, wage, etc.) and submits them.

How to Pay Taxes in Japan?

• A non-resident's Japan-sourced employment income is subject to a flat withholding tax rate of 20.42% (inclusive of a 2.1% surtax rate), with no deductions available. • In addition to withholding tax, non-residents may also be subjected to aggregate taxation depending on the nature of their income.

Tax Rates in Japan for Non-Residents

Per aggregate taxation, non-residents must calculate their tax liability through self-assessment and file an income tax return. In Japan, national income tax rates can go up to 45% of taxable income minus the deductions.

Tax Rates in Japan for Non-Residents

Japan has double tax treaties with over 80 countries, including the US, UK, Australia, etc. If a Japanese non-resident is a resident in a tax-treaty country, their income may be either tax-exempt or taxed at a lower rate.

Tax Treaties between Japan and Your Country of Residence

Japan has one of the highest tax rates in the world. Considering that, it makes complete sense to establish your tax residency elsewhere to save your wealth and use it for something worthwhile. Contact us today, and we'll help you legally reduce your tax rate.

Should You Establish a Tax-Non-Residency in Japan?

Our experienced team can help you legally reduce your tax rate offshore, protect your assets, invest overseas, obtain a second citizenship, and improve your peace of mind.  We’ve helped 2,000+ HNWI entrepreneurs and investors and we can help you, too.

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