Visa holders · From Japan
Juminzei, Japan’s resident tax, still falls on your income from the year before moving to the US from Japan. Taxes owed after you go are usually paid through a tax agent.
Japan charges each year’s resident tax to people with an address there on January 1. Your city may drop its tax agent requirement if you pay that year’s resident tax in full before you leave. Your income in the year you leave escapes it if you have no Japanese address the next January 1.
Updated · Sources
Thresholds and time limits on leaving Japan
- ¥100M
- of securities and funds, held anywhere, can bring the exit tax as you leave.
- 2 years
- is your window to reclaim Japanese pension contributions after your address there ends, if you are not a Japanese national.
- 10 years
- is how long, after leaving, Japanese gift tax reaches a Japanese national’s gifts of property anywhere, from any donor. Gifts from parents living in Japan have no such limit.
What decides how Japan taxes the year you leave?
You take a job abroad expected to last a year or more
Japan presumes you are a non-resident from the day you leave when a job abroad is expected to last a year or more. If your plans change later, your status changes only from that point, never back to the day you left.
Your spouse or children stay behind
Family who stay in Japan may keep you a Japanese resident, even after you spend half the year or more abroad. Japan decides from objective facts: your home, job, assets, where your relatives live and your nationality.
You have income besides your salary
You must file a Japanese return for your final year if other income, such as rent, passes ¥200,000 or your pay passes ¥20 million. You can file it yourself before you leave. Otherwise, name a tax agent (nozei kanrinin) by your departure, who files it between February 16 and March 15 of the next year. On a posting abroad, your employer settles the tax on a salary alone before you go.
File a moving-out notice at your city office to close your resident record. That record decides whether next year’s resident tax reaches you. Japan Pension Service also accepts a pension refund claim only after the record closes.
Japan’s exit tax counts your NISA toward ¥100 million, but never your bank deposits.
Japan’s exit tax treats your securities and funds as sold the moment you leave. It applies after more than 5 of your last 10 years in Japan, and years on a work or study visa do not count. Years as a Japanese national or a permanent resident all count.
Shares
¥70,000,000
They count, and their ¥40 million gain is taxed.
NISA holdings
¥35,000,000
They lift your total past ¥100 million, though their own gain stays tax-free.
Bank deposits
¥50,000,000
Cash and deposits are left out, so they neither count nor get taxed.
Exit tax
¥6,126,000
That is 15% income tax on the ¥40 million gain, plus a 2.1% surtax on that tax.
The 5% resident tax on share gains does not apply, since the Local Tax Act leaves the exit tax out. After the exit tax, Japan counts ¥70 million as your shares’ cost basis. The US keeps what you paid as your basis, so a later US sale is taxed on the whole gain since you bought. If you name a tax agent and post security (collateral), you can defer payment for 5 years, or 10 with an extension. Japan charges interest on the deferred tax, at 1.3% a year for 2026. Move back within that time, and the tax on assets you still hold can be cancelled. If you deferred and later sell as a US resident, Japan may credit the US tax on that sale against the exit tax.
Where does the US-Japan tax treaty put each kind of Japanese income?
Japanese payers apply the treaty’s limits only once you give them Japan’s treaty application form with Form 6166, the IRS certificate of US residency. File it before the first payment, or claim a refund of the excess from Japan later.
| Japan | US | |
|---|---|---|
| Interest from a Japanese bank | Not taxed Article 11(1), as amended in 2013 | Taxed |
| Dividends from Japanese companies | Up to 10% Article 10(2); 15.315% or more is withheld without the form | Taxed Credit for the 10% treaty rate |
| Gains on Japanese shares and funds | Not taxed Article 13(7), unless the company’s value is mainly Japanese real estate | Taxed From your original cost |
| Rent from, or a sale of, property in Japan | Taxed Usually 20.42% of rent or 10.21% of the price withheld | Taxed Credit for the final Japanese tax |
| Your monthly national or employees’ pension | Not taxed Article 17, once Japan has your treaty forms | Taxed Under the annuity rules |
The US credits none of the Japanese tax withheld beyond a treaty rate. The treaty covers only federal income tax, so a state such as California applies its own law to your Japanese income.
Which Japanese funds, pay, gifts and pension premiums change your US return?
Investment trusts and J-REITs from Japan
For a US resident, managed Japanese investment trusts, Tokyo-listed ETFs set up as trusts and J-REITs usually count as passive foreign investment companies (PFICs). Each fund generally needs its own Form 8621 every year. A US-domiciled ETF bought on the Tokyo exchange is not a PFIC.
Workdays and board seats in Japan
Japan withholds 20.42% on pay for days you work there, bonuses included, and on board fees from a Japanese company (Article 15). The treaty’s 183-day exemption does not help while a Japanese employer pays you. The US credits that Japanese tax against your US tax on the same income, on Form 1116.
Japanese gift tax that you, not the giver, owe
Japanese gift tax falls on you, the recipient, on gifts above ¥1.1 million in a calendar year. It can still reach you after you move. You file between February 1 and March 15 of the next year. The US charges no income tax on the gift.
Paying Japanese premiums with no US deduction
On a posting from Japan, such as one on an L-1, the US-Japan totalization agreement can keep you in Japan’s pension and health insurance. Your Japanese premiums then replace US Social Security and Medicare tax, but they earn no US deduction or credit. The agreement has been in force since October 1, 2005.
We credit the tax Japan keeps and give each Japanese account its US form.
Valim’s CPAs prepare every US tax return for people moving from Japan, working alongside whoever handles your Japanese filings.
- We split your arrival year at your US residency starting date. We then report your Japanese income on your US return, including pay that lands late, such as a final bonus.
- We report your Japanese bank, brokerage, NISA and iDeCo accounts on the FBAR, Form 8938 or both, as each one requires. Your instant quote prices every Japanese account and fund, and any Japanese company you own more than 20% of.
- Before your US residency starting date, we weigh selling NISA funds while a sale is still free of tax in both countries. After you arrive, we work out your quarterly estimated tax on Japanese rent and dividends.
- We credit Japan’s tax on your dividends or rent on Form 1116, counting only what Japan keeps after any refund. For a pension lump-sum withdrawal, we first check whether the treaty allows a US credit for Japan’s tax.
- When gifts from family in Japan top $100,000 in a year, we prepare the Form 3520 that reports them.
- Your fee for a return we prepare covers our reply to any later IRS or state notice on it, such as one about NISA income.
- Individual return
- from $195
- Business return
- from $495
We quote a flat fee before work starts. We do not bill hourly.
Questions about leaving Japan for the US.
Does Japan have a tax treaty with the US?
Yes: the US-Japan tax treaty, a 2003 convention, is in force, and a 2013 protocol rewrote parts of it. The convention entered into force on March 30, 2004, and the protocol on August 30, 2019. The protocol applies to most taxes from January 1, 2020, and it removed the old exemption for visiting teachers and researchers. The treaty’s saving clause preserves each country’s own law for its residents, and the US’s for its citizens too. Listed exceptions, such as the foreign tax credit, still apply.
What happens to my NISA and iDeCo when I move to the US?
Your NISA normally closes the day you leave Japan, while your iDeCo usually stays invested until you are at least 60. A NISA stays open only on an employer transfer or similar unavoidable move, and never in a year you owe Japan’s exit tax. If your broker offers it, a notice by the day before you leave keeps it open for up to about 5 years, without new purchases. In the US, neither account is tax-free, and the Japanese funds inside usually count as PFICs. Your NISA belongs on the FBAR once your foreign accounts pass $10,000, and both accounts go on Form 8938 above its thresholds.
Can I get my Japanese pension contributions back when I leave Japan?
Yes, if you are not a Japanese national: claim Japan’s pension lump-sum withdrawal payment within 2 years after your address there ends. You need 6 months of coverage, no past right to a Japanese pension and fewer than 10 years toward one, US coverage included. Taking it erases your whole Japanese pension record, and the payment counts at most 60 months of coverage. Japan withholds 20.42% from the employees’ pension part, which a refund return filed through a tax agent can recover in part or in full. Paid while you are a US resident, it also belongs on your US return.
Sources
- US-Japan income tax convention (2003)
- Protocol to the US-Japan convention (2013)
- US Department of State, US-Japan protocol, TIAS 19-830
- US Department of State, Treaties in Force 2025
- Treasury, technical explanation of the US-Japan convention (2003)
- Japan, Local Tax Act on e-Gov, Articles 32, 39, 294, 300 and 313
- Japan National Tax Agency, who must file a return (Tax Answer 1900)
- Japan National Tax Agency, working abroad (Tax Answer 1920)
- Japan National Tax Agency, resident or non-resident (Tax Answer 2012)
- Japan National Tax Agency, income while working abroad (Tax Answer 1926)
- Japan National Tax Agency, year-end adjustment on a transfer abroad (Tax Answer 2517)
- Japan National Tax Agency, exit tax on departure (Tax Answer 1478)
- Japan National Tax Agency, exit tax FAQ (June 2023)
- Japan National Tax Agency, tax on share gains (Tax Answer 1463)
- Japan National Tax Agency, interest tax rates
- Japan National Tax Agency, withholding rates for non-residents (Tax Answer 2884)
- Japan National Tax Agency, treaty forms for withholding (Tax Answer 2888)
- Japan National Tax Agency, when gift tax applies (Tax Answer 4402)
- Japan, Inheritance Tax Act, Article 1-4 (e-Gov)
- Japan, Special Taxation Measures Act on e-Gov, Articles 37-14 and 93
- National Pension Fund Association, how iDeCo works
- Japan Pension Service, Lump-sum Withdrawal Payment claim form (2026)
- Social Security Administration, US-Japan social security agreement (text)
- IRS, Publication 519 (2025), U.S. Tax Guide for Aliens
- IRS, Publication 915, Social Security and Equivalent Railroad Retirement Benefits
- IRS, Publication 514, Foreign Tax Credit for Individuals
- IRS, Form 6166, Certification of U.S. Tax Residency
- 26 C.F.R. § 1.901-2, Income, war profits, or excess profits tax paid or accrued
- 26 U.S.C. § 1012, Basis of property: cost
- 26 U.S.C. § 102, Gifts and inheritances
- 26 U.S.C. § 1297, Passive foreign investment company
- 26 C.F.R. § 1.1298-1, Section 1298(f) annual reporting for PFIC shareholders (Form 8621)
- 31 C.F.R. § 1010.350, Reports of foreign financial accounts
- IRS, Instructions for Form 8938
- IRS, Instructions for Form 3520 (Rev. December 2025)
Reviewed and updated October 2026. General information, not advice for your situation.