Japan

Individual - Foreign tax relief and tax treaties

Last reviewed - 01 September 2020

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 non-Japan-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 1 June, 2020, Japan has tax treaties with the following countries:

Australia Hong Kong Panama
Austria Hungary Philippines
Bahamas Iceland Poland
Bangladesh India Portuguese Republic
Belgium Indonesia Qatar
Bermuda Ireland, Republic of Russia
Brazil Isle of Man Romania
British Virgin Islands Israel Samoa
Brunei Italy Saudi Arabia
Bulgaria Jersey Singapore
Canada Kazakhstan Slovenia
Cayman Islands Korea, Republic of South Africa
Chile Kuwait Spain
China Latvia Sri Lanka
Croatia Liechtenstein Sweden
Czechoslovakia (1) Lithuania Switzerland
Denmark Luxembourg Taiwan
Ecuador Macao Thailand
Egypt Malaysia Turkey
Estonia Mexico USSR (2)
Fiji Netherlands United Arab Emirates
Finland New Zealand United Kingdom
France Norway United States
Germany Oman Vietnam
Guernsey Pakistan Zambia

Notes

  1. The treaty with the former Czechoslovakia is applied to the Czech Republic and the Slovak Republic.
  2. The treaty with the former USSR is applied to Armenia, Azerbaijan, Belarus, Georgia, Kyrgyzstan, Moldova, Tajikistan, Turkmenistan, Ukraine, and Uzbekistan.

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 30 September 2019, it is effective with Australia, Austria, Belgium, Canada, Cyprus, Czech Republic, Denmark, Finland, France, Georgia, Guernsey, Iceland, India, Indonesia, Ireland, Isle of Man, Israel, Jersey, Republic of Korea, Latvia, Liechtenstein, Lithuania, Luxembourg, Malta, Mauritius, Monaco, Netherlands, New Zealand, Norway, Poland, Portugal, Qatar, Russia, San Marino, Saudi Arabia, Serbia, Singapore, Slovakia, Slovenia, Sweden, Switzerland, Ukraine, United Arab Emirates, United Kingdom, and Uruguay.

Totalisation agreements

Designed to avoid overlaps in social security enrolment, Japan has entered into social security agreements with several countries. As of 30 June 2020, 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.