Who Needs to File a Japanese Tax Return After Leaving Japan?
【Koshida Accounting Firm Column Date:】
The hardest thing in the world to understand is income taxes – Albert Einstein
Hello, my name is Taisei Koshida, a certified public accountant and tax accountant in Japan.
If you worked in Japan and are planning to leave, you may be wondering whether you still need to file a Japanese income tax return (kakutei shinkoku / 確定申告).
Leaving Japan does not automatically eliminate your Japanese tax filing obligations. Whether you need to file a tax return depends on factors such as whether your employer completed a year-end tax adjustment, whether you continue to receive Japan-source income after leaving Japan, and whether you are subject to estimated income tax payments.
In this article, I explain the main situations in which someone who worked in Japan may need to file a Japanese tax return before or after leaving the country.
1. If Your Employer Did Not Complete a Year-End Tax Adjustment
For many employees in Japan, their employer settles their annual income tax through a year-end tax adjustment (年末調整).
If your employer completed a year-end tax adjustment before you left Japan and your salary was your only income subject to Japanese income tax, you generally do not need to file a separate income tax return.
However, if your employer did not complete a year-end tax adjustment, you may need to file a Japanese income tax return to settle your income tax for the year.
This is particularly important for people who leave Japan during the year, because their employment may end before the normal year-end adjustment process is completed.
2. If You Continue to Receive Japan-Source Income After Leaving Japan
Leaving Japan does not necessarily end your Japanese tax obligations.
If you continue to receive Japan-source income after becoming a non-resident of Japan, you may still need to file a Japanese income tax return.
A common example is income from real estate located in Japan. If you leave Japan but continue to own and rent out Japanese property, the rental income remains relevant for Japanese income tax purposes.
In such cases, you may also need to appoint a tax agent (納税管理人) in Japan to handle tax procedures on your behalf after you leave the country.
3. If You Are Subject to Estimated Income Tax Payments
Another point to check before leaving Japan is whether you are subject to estimated income tax payments (予定納税).
In general, if your estimated tax base amount (予定納税基準額), which is generally calculated based on the previous year’s income tax, is ¥150,000 or more, you may be required to make estimated income tax payments for the current year.
The timing of your departure from Japan is important. If you are still a resident of Japan as of June 30 and are subject to the estimated tax payment system, the obligation may already have arisen for that year.
Therefore, if you leave Japan after June 30, you should check both your income tax return filing requirements and any outstanding estimated income tax obligations before departure.
4. When Employees Generally Do Not Need to File a Tax Return
Many employees in Japan do not need to file a separate income tax return because income tax is withheld from their salary and settled through the year-end tax adjustment system.
For example, if you received salary from only one employer, your employer properly withheld income tax and completed the necessary year-end tax adjustment, and your annual salary did not exceed ¥20 million, you generally do not need to file an income tax return solely for that salary.
However, a tax return may still be required if you have other income or if another filing requirement applies to your situation.
Therefore, leaving Japan itself does not determine whether a tax return is required. Your sources of income and how your employment income was taxed are also important.
If you are applying for the above, you must file tax returns. Plus, people who are applying for the above 2 need to nominate an agent of tax payment. Besides, in other cases, if you can not file tax returns till you leave Japan, you need to nominate an agent of tax payment, too.
5. When Do You Need to Appoint a Tax Agent in Japan?
If you leave Japan while you still have Japanese tax filing or payment obligations, you may need to appoint a tax agent (納税管理人) in Japan.
For example, if you continue to receive Japan-source income, such as rental income from property in Japan, after becoming a non-resident, a tax agent can handle tax notices, filings, and payments on your behalf.
A tax agent may also be necessary if you are required to file a Japanese income tax return but cannot complete the filing before leaving Japan.
The tax agent does not need to be a tax accountant simply to be appointed as a tax agent. However, if professional preparation of a tax return or tax advice is required, the relevant Japanese tax professional rules should also be considered.
If you need to file a Japanese income tax return, you may also find the following article useful:
How to Pay Individual Income Tax for Sole Proprietors in Japan
If you were a non-permanent resident for Japanese tax purposes while living in Japan and also received income from outside Japan, different rules may apply to your foreign-source income and remittances.
For more information, see:
Moving to Japan? How Your U.S. Income Is Taxed in Japan
6. FAQ: Filing a Japanese Tax Return After Leaving Japan
Do I automatically need to file a Japanese tax return because I left Japan during the year?
No. Leaving Japan during the year does not by itself mean that you must file a tax return. Your filing requirement depends on your income, whether your employer completed a year-end tax adjustment, and whether you have other Japanese tax filing obligations.
Can my employer’s year-end tax adjustment complete my Japanese income tax obligations before I leave Japan?
In some cases, yes. If your employer can complete the applicable year-end tax adjustment and you have no other income requiring a tax return, you may not need to file a separate income tax return.
What happens if I leave Japan before I can file my tax return?
If you have a filing obligation and cannot complete the necessary tax procedures before leaving Japan, you may need to appoint a tax agent in Japan to handle the procedures after your departure.
If I keep a rental property in Japan after moving overseas, do I still have Japanese tax obligations?
Yes. Income from real estate located in Japan is generally Japan-source income. Becoming a non-resident does not make the Japanese taxation of that income disappear.
Can a friend or family member be my tax agent in Japan?
A tax agent does not necessarily have to be a tax accountant merely to be appointed as your tax agent. However, the preparation of tax returns and provision of professional tax advice are separate matters subject to Japanese rules governing tax professionals.
Can I receive a Japanese tax refund after leaving Japan?
Potentially, yes. Leaving Japan does not by itself prevent you from receiving a refund if you have overpaid Japanese income tax. Whether you are entitled to a refund depends on your individual tax calculation and filing situation.
Japanese Tax Return Support in English
Koshida Accounting and Tax Office provides accounting and tax services in Japan with English support.
We assist foreign individuals, entrepreneurs, and small business owners with Japanese income tax returns (kakutei shinkoku / 確定申告), accounting in Japan, and tax matters arising when moving to or leaving Japan.
If you are leaving Japan and are unsure whether you need to file a tax return, appoint a tax agent, or report income received after your departure, we can review your individual situation and assist with the necessary Japanese tax procedures.
Through our network of specialists, we can also connect clients with professionals in areas such as visas, registration, social insurance, and legal matters.
Please feel free to contact us through the inquiry form.