Under the 2018 tax reform, the scope of tax payment obligations of inheritance tax/gift tax for foreign nationals was amended.
Under the 2017 tax reform, the scope of the tax payment obligations of inheritance tax/gift tax was amended in that inheritance tax/gift tax will not be imposed on properties located outside Japan with respect to inheritance/gifts involving foreign nationals living or having lived temporarily in Japan under certain conditions.
However, the 2017 tax reform also included amendments to expand the scope of taxable properties for cases where a foreign national living outside Japan (an heir/donee) obtains properties from a foreign national who had lived in Japan for more than 10 years (a decedent/donor) within 5 years after the decedent/donor left Japan. The new tax treatment has caused concern that it would work to discourage foreign nationals from working in Japan on long-term assignments.
In consideration of the above concern, by virtue of the 2018 tax reform, properties located outside Japan will be treated in principle as non-taxable properties for inheritance tax/gift tax purposes where a decedent/donor is a foreign national who has already left Japan.