Japan

Individual - Foreign tax relief and tax treaties

Last reviewed - 16 August 2021

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

Armenia

Hong Kong

Peru

Australia

Hungary

Philippines

Austria

Iceland

Poland

Azerbaijan

India

Portugal

Bahamas*

Indonesia

Qatar

Bangladesh

Ireland

Romania

Belarus

Isle of Man*

Russia

Belgium

Israel

Samoa*

Bermuda*

Italy

Saudi Arabia

Brazil

Jamaica

Singapore

British Virgin Islands*

Jersey*

Slovakia

Brunei

Kazakhstan

Slovenia

Bulgaria

Korea

South Africa

Canada

Kuwait

Spain

Cayman Islands*

Kyrgyz

Sri Lanka

Chile

Latvia

Sweden

China

Lichtenstein*

Switzerland

Croatia

Lithuania

Taiwan※

Czech Republic

Luxembourg

Tajikistan

Denmark

Macao*

Thailand

Ecuador

Malaysia

Turkey

Egypt

Mexico

Turkmenistan

Estonia

Moldova

Ukraine

Fiji

Netherlands

United Arab Emirates

Finland

New Zealand

United Kingdom

France

Norway

United States

Georgia

Oman

Uzbekistan

Germany

Pakistan

Vietnam

Guernsey*

Panama*

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. 65 conventions cover 74 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 129 jurisdictions who are a part of this multilateral agreement, 73 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 be 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 the United Kingdom, Korea, Italy and China only cover the prevention of double enrolment.