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Japan - Overview and Introduction

Japan - Overview and Introduction

Taxation of international executives

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Individual income taxes in Japan consist of a national income tax and a local inhabitant tax. Japan also imposes gift and inheritance taxes. A Japanese permanent resident is taxed on worldwide income with reference to progressive tax rates. A non-permanent resident is taxed on the greater of Japanese-source income or the amount paid in and/or remitted to Japan. Foreign tax credits are available for taxpayers. Japan has an extensive tax treaty network which mitigates double taxation. Japan has a floating exchange rate so that the value of the Japanese Yen varies with market forces.

The official Japanese currency is the Japanese Yen (JPY).

Herein, the host country/jurisdiction refers to the country/jurisdiction to which the employee is assigned. The home country/jurisdiction refers to the country/jurisdiction where the assignee lives when they are not on assignment.  

Disclaimer

All information contained in this publication is summarized by KPMG Tax Corporation, a tax corporation incorporated under the Japanese CPTA Law and a member firm of the KPMG global organization of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. The information contained in this publication is based onthe Japanese Individual Income Tax Law, the Enforcement Cabinet Order of the Individual Income Tax Law, and the Basic Administrative Ruling of the Individual Income Tax Law as of 31 July 2020.

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© 2020 KPMG Tax Corporation, a tax corporation incorporated under the Japanese CPTA Law and a member firm of the KPMG global organization of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved.

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