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Japan
Individual - Foreign tax relief and tax treaties
Last reviewed - 23 January 2024Foreign tax relief
Resident taxpayers can credit foreign income taxes against their Japanese national tax and local inhabitant’s tax liabilities (with certain limitations), where foreign-source income is taxed in Japan. Non-resident taxpayers are not entitled to take foreign tax credits on their Japan income tax returns unless they have a permanent establishment (PE) in Japan.
Tax treaties
As of 1 June 2023, Japan has tax treaties with the following countries:
| Armenia (1, 3) | Hungary (1, 3) | Poland (1, 3) |
| Australia (1, 3) | Iceland (1, 3) | Portugal (1, 3) |
| Austria (1, 3) | India (1, 3) | Qatar (1, 3) |
| Azerbaijan (1, 3) | Indonesia (1, 3) | Romania (1, 3) |
| Bahamas (2, 3) | Ireland (1, 3) | Russia (1, 3) |
| Bangladesh (1) | Isle of Man (2, 3) | Samoa (2, 3) |
| Belarus (1) | Israel (1, 3) | Saudi Arabia (1, 3) |
| Belgium (1, 3) | Italy (1, 3) | Serbia (1, 3) |
| Bermuda (2, 3) | Jamaica (1, 3) | Singapore (1, 3) |
| Brazil (1, 3) | Jersey (2, 3) | Slovakia (1, 3) |
| British Virgin Islands (2, 3) | Kazakhstan (1, 3) | Slovenia (1, 3) |
| Brunei (1, 3) | Korea (1, 3) | South Africa (1, 3) |
| Bulgaria (1, 3) | Kuwait (1, 3) | Spain (1, 3) |
| Canada (1, 3) | Kyrgyzstan (1) | Sri Lanka (1) |
| Cayman Islands (2, 3) | Latvia (1, 3) | Sweden (1, 3) |
| Chile (1, 3) | Liechtenstein (2, 3) | Switzerland (1, 3) |
| China (1, 3) | Lithuania (1, 3) | Taiwan (4) |
| Colombia (1, 3) | Luxembourg (1, 3) | Tajikistan (1) |
| Croatia (1, 3) | Macao (2, 3) | Thailand (1, 3) |
| Czech Republic (1, 3) | Malaysia (1, 3) | Turkey (1, 3) |
| Denmark (1, 3) | Mexico (1, 3) | Turkmenistan (1) |
| Ecuador (1, 3) | Moldova (1, 3) | Ukraine (1, 3) |
| Egypt (1) | Morocco (1, 3) | United Arab Emirates (1, 3) |
| Estonia (1, 3) | Netherlands (1, 3) | United Kingdom (1, 3) |
| Fiji (1) | New Zealand (1, 3) | United States (1, 3) |
| Finland (1, 3) | Norway (1, 3) | Uruguay (1, 3) |
| France (1, 3) | Oman (1, 3) | Uzbekistan (1) |
| Georgia (1, 3) | Pakistan (1, 3) | Vietnam (1) |
| Germany (1, 3) | Panama (2, 3) | Zambia (1) |
| Guernsey (2, 3) | Peru (1, 3) | |
| Hong Kong (1, 3) | Philippines (1, 3) |
Notes
- These jurisdictions have tax conventions in Japan that were formed primarily to eliminate double taxation and prevent tax evasion and avoidance. 70 conventions cover 78 jurisdictions. The number of tax conventions and countries do not match due to multiple cases where conventions were succeeded by multiple jurisdictions.
- These jurisdictions are in a tax information exchange agreement that was formed primarily to exchange information regarding tax matters. 11 conventions cover 11 jurisdictions.
- These jurisdictions are signatories of the Convention of Mutual Administrative Assistance in Tax Matters and have bilateral agreements with Japan. Out of 140 jurisdictions who are a part of this multilateral agreement, 78 have formed bilateral agreements with Japan.
- The government of Japan does not have an international agreement with the government of Taiwan; however, a private-sector tax agreement is in place between the Japan-Taiwan Exchange Association of Japan and the Taiwan-Japan Relations Association of Taiwan.
Mutual Administrative Assistance
Japan is a signatory to the Convention on Mutual Administrative Assistance in Tax Matters, which is currently in effect.
Base Erosion and Profit Shifting (BEPS) Agreement
On 7 June 2017, Japan signed the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent BEPS, which will not take effect until the instrument of ratification is submitted. As of 20 June 2023, this treaty is in effect with Australia, Bulgaria, Canada, China, the Czech Republic, Egypt, Finland, France, Germany, Hong Kong, Hungary, India, Indonesia, Ireland, Israel, Kazakhstan, the Republic of Korea, Luxembourg, Malaysia, Mexico, the Netherlands, New Zealand, Norway, Oman, Pakistan, Poland, Portugal, Qatar, Romania, Saudi Arabia, Singapore, Slovakia, South Africa, Sweden, Thailand, Ukraine, the United Arab Emirates, the United Kingdom, and Vietnam.
Totalisation agreements
Designed to avoid overlaps in social security enrolment, Japan has entered into social security agreements with several countries. This agreement has two effects, which are the following:
- Prevention of double enrolment: Social insurance systems are coordinated to prevent dual enrolment.
- Totalisation of period of pension participation: The period of pension participation is summed between the two countries so that it is easier for insured persons to meet the requirements for the period of participation needed to receive pension benefits.
As of June 2023, the agreements currently in effect are with Australia, Belgium, Brazil, Canada, China, the Czech Republic, Finland, France, Germany, Hungary, India, Ireland, the Republic of Korea, Luxembourg, the Netherlands, the Philippines, the Slovak Republic, Spain, Sweden, Switzerland, the United Kingdom, and the United States. Agreements with Italy have been signed and are in the process of implementation. The agreements with China, Italy, the Republic of Korea, and the United Kingdom only cover the prevention of double enrolment.
