Japan

Individual - Foreign tax relief and tax treaties

Last reviewed - 03 February 2022

Foreign 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 one has a PE in Japan.

Tax treaties

As of 14 December 2021, Japan has tax treaties with the following countries:

Armenia

Hungary

Philippines

Australia

Iceland

Poland

Austria

India

Portugal

Azerbaijan

Indonesia

Qatar

Bahamas*

Ireland

Romania

Bangladesh

Isle of Man*

Russia

Belarus

Israel

Samoa*

Belgium

Italy

Saudi Arabia

Bermuda*

Jamaica

Singapore

Brazil

Jersey*

Serbia

British Virgin Islands*

Kazakhstan

Slovakia

Brunei

Korea

Slovenia

Bulgaria

Kuwait

South Africa

Canada

Kyrgyz

Spain

Cayman Islands*

Latvia

Sri Lanka

Chile

Lichtenstein*

Sweden

China

Lithuania

Switzerland

Croatia

Luxembourg

Taiwan※

Czech Republic

Macao*

Tajikistan

Denmark

Malaysia

Thailand

Ecuador

Mexico

Turkey

Egypt

Moldova

Turkmenistan

Estonia

Netherlands

Ukraine

Fiji

New Zealand

United Arab Emirates

Finland

Norway

United Kingdom

France

Oman

United States

Georgia

Pakistan

Uruguay

Germany

Panama*

Uzbekistan

Guernsey*

Paraguay

Vietnam

Hong Kong

Peru

Zambia

Notes

  1.  Jurisdictions with an underline have tax conventions in Japan, which were formed primarily to eliminate double taxation and prevent tax evasion and avoidance. 68 conventions cover 76 jurisdictions. The number of tax conventions and countries do not match due to multiple cases where conventions were succeeded by multiple jurisdictions.
  2. Jurisdictions marked with an asterisk are in a tax information exchange agreement, which were formed primarily to exchange information regarding tax matters. 11 conventions cover 11 jurisdictions.
  3. Jurisdictions in bold font are signatories of the Convention of Mutual Administrative Assistance in Tax Matters and have bilateral agreements with Japan. Out of 134 jurisdictions who are a part of this multilateral agreement, 74 have formed bilateral agreements with Japan.
  • Japan does not have an international agreement between governments with Taiwan, but a private-sector tax agreement between the Japan-Taiwan Exchange Association of Japan and the Taiwan-Japan Relations Association of Taiwan.

Mutual Administrative Assistance

Japan has signed a Convention on Mutual Administrative Assistance in Tax Matters and it is effective.

Base Erosion and Profit Shifting (BEPS) Agreement

On 7 June 2017, Japan signed a Multilateral Convention to Implement Tax Treaty Related Measures to Prevent BEPS, which will not be effective until the instrument of ratification is submitted. As of 20 April 2021, it is effective with Australia, Canada, Czech Republic, Egypt, Finland, France, Germany, Hungary, India, Indonesia, Ireland, Israel, Kazakhstan, Republic of Korea, Luxembourg, Malaysia, Netherlands, New Zealand, Norway, Oman, Pakistan, Poland, Portugal, Qatar, Saudi Arabia, Singapore, Slovakia, Sweden, Ukraine, United Arab Emirates, and the United Kingdom.

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:

  1. Prevention of double enrolment: Social insurance systems are coordinated to prevent dual enrolment.
  2. 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 period of participation needed to receive pension benefits.

As of June 2021, the agreements currently in effect are with Australia, Belgium, Brazil, Canada, China, the Czech Republic, France, Germany, Hungary, India, Ireland, Korea, Luxembourg, the Netherlands, Philippines, Slovak Republic, Spain, Switzerland, the United Kingdom, and the United States. Agreements with Finland, Italy, and Sweden have been signed and are in the process of implementation. The agreements with China, Italy, Korea, and the United Kingdom only cover the prevention of double enrolment.