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Japan
Individual - Foreign tax relief and tax treaties
Last reviewed - 19 January 2023Foreign 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 2022, Japan has tax treaties with the following countries:
| Armenia (1, 3) | Hungary (1, 3) | Philippines (1, 3) |
| Australia (1, 3) | Iceland (1, 3) | Poland (1, 3) |
| Austria (1, 3) | India (1, 3) | Portugal (1, 3) |
| Azerbaijan (1, 3) | Indonesia (1, 3) | Qatar (1, 3) |
| Bahamas (2, 3) | Ireland (1, 3) | Romania (1, 3) |
| Bangladesh (1) | Isle of Man (2, 3) | Russia (1, 3) |
| Belarus (1) | Israel (1, 3) | Samoa (2, 3) |
| Belgium (1, 3) | Italy (1, 3) | Saudi Arabia (1, 3) |
| Bermuda (2, 3) | Jamaica (1, 3) | Serbia |
| Brazil (1, 3) | Jersey (2, 3) | Singapore (1, 3) |
| British Virgin Islands (2, 3) | Kazakhstan (1, 3) | Slovakia (1, 3) |
| Brunei (1, 3) | Korea (1, 3) | Slovenia (1, 3) |
| Bulgaria (1, 3) | Kuwait (1, 3) | South Africa (1, 3) |
| Canada (1, 3) | Kyrgyzstan (1) | Spain (1, 3) |
| Cayman Islands (2, 3) | Latvia (1, 3) | Sri Lanka (1) |
| Chile (1, 3) | Liechtenstein (2, 3) | Sweden (1, 3) |
| China (1, 3) | Lithuania (1, 3) | Switzerland (1, 3) |
| Croatia (1, 3) | Luxembourg (1, 3) | Taiwan (4) |
| Czech Republic (1, 3) | Macao (2, 3) | Tajikistan (1) |
| Denmark (1, 3) | Malaysia (1, 3) | Thailand (1, 3) |
| Ecuador (1, 3) | Mexico (1, 3) | Turkey (1, 3) |
| Egypt (1) | Moldova (1, 3) | Turkmenistan (1) |
| Estonia (1, 3) | Netherlands (1, 3) | Ukraine (1, 3) |
| Fiji (1) | New Zealand (1, 3) | United Arab Emirates (1, 3) |
| Finland (1, 3) | Norway (1, 3) | United Kingdom (1, 3) |
| France (1, 3) | Oman (1, 3) | United States (1, 3) |
| Georgia (1, 3) | Pakistan (1, 3) | Uruguay |
| Germany (1, 3) | Panama (2, 3) | Uzbekistan (1) |
| Guernsey (2, 3) | Paraguay (1, 3) | Vietnam (1) |
| Hong Kong (1, 3) | Peru (1, 3) | Zambia (1) |
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 136 jurisdictions who are a part of this multilateral agreement, 77 have formed bilateral agreements with Japan.
- Japan does not have an international agreement between governments with Taiwan; however, a private-sector tax agreement exists 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 21 April 2022, it is effective with Australia, Canada, China, Czech Republic, Egypt, Finland, France, Germany, Hong Kong, Hungary, India, Indonesia, Ireland, Israel, Kazakhstan, Republic of Korea, Luxembourg, Malaysia, Netherlands, New Zealand, Norway, Oman, Pakistan, Poland, Portugal, Qatar, Romania, Saudi Arabia, Singapore, Slovakia, Sweden, Thailand, 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:
- 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 period of participation needed to receive pension benefits.
As of June 2022, the agreements currently in effect are with Australia, Belgium, Brazil, Canada, China, the Czech Republic, Finland, France, Germany, Hungary, India, Ireland, Korea, Luxembourg, the Netherlands, Philippines, 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, Korea, and the United Kingdom only cover the prevention of double enrolment.
