Kakutei shinkoku (確定申告) is Japan's annual income tax return, filed between mid-February and mid-March covering the previous calendar year. Most company employees never file one — their employer handles year-end tax adjustment (年末調整, nenmatsuchousei) on their behalf. But for foreign residents specifically, there's a layer underneath the standard employee situation that determines both whether you must file and how much you owe — and getting it wrong in either direction has consequences. This guide covers who actually needs to file, the tax category most foreigners are in without knowing it, and the situations that most commonly catch people out.
The Tax Category Most Foreign Residents Don't Know They're In
Japan's income tax system has three residency categories for individuals, and which one you fall into determines what income is taxable in Japan.
The three categories — and where most foreigners sit
Resident (居住者): anyone with a domicile in Japan, or who has lived continuously in Japan for 1+ year. This is most foreign residents on work, spouse, or long-term visas. Sub-divided into two critical types below.
Non-resident (非居住者): someone without domicile in Japan and not continuously living here for 1+ year. Only Japan-sourced income is taxable. Most short-term visitors and people on tourist visas.
The critical distinction within residents: Permanent resident for tax (永住者 — note: tax concept, different from immigration PR status): a Japanese national, or a foreign national who has been resident in Japan for more than 5 cumulative years in the past 10 years. Taxable on worldwide income from all sources.
Non-permanent resident for tax (非永住者): a foreign national who does NOT hold Japanese nationality AND has been resident in Japan for 5 years or less cumulatively in the past 10 years. This is where most foreign residents on work visas are in their first years in Japan.
非永住者 status changes what overseas income is taxable — and most guides get this wrong
As a 非永住者 (non-permanent resident for tax purposes), you are NOT taxed on all worldwide income. You're taxed on: all income sourced in Japan, AND overseas income that is paid in Japan or remitted to Japan. Overseas income that stays overseas is NOT taxable in Japan during this period. This is meaningfully different from "residents pay tax on everything" — a claim that most English-language Japan tax guides state incorrectly. After 5 cumulative years of residence in Japan (not 5 consecutive years — cumulative), you shift to full resident status and worldwide income becomes taxable regardless of where it stays.
Who Must File — The Actual Situations
If your employer does year-end adjustment (nenmatsuchousei) and you have only one employer and no other income, you probably don't need to file. Everyone else should check their situation against this list.
You must file if:
Multiple employers: If you worked for more than one employer during the year and neither did a coordinated year-end adjustment covering both, you must file yourself to reconcile the total.
Side income over ¥200,000: If you have income from sources other than your main employer — freelance work, rental income, overseas contract work, consulting — and that additional income exceeds ¥200,000 in a year, you must file even if your employer did year-end adjustment. The ¥200,000 threshold applies to 雑所得 (miscellaneous income) and 事業所得 (business income) combined.
Overseas income remitted to Japan (non-permanent residents): If you receive income from overseas — a salary from a foreign company, freelance payments from overseas clients, rental income from property abroad — and that money is sent to or deposited into a Japanese bank account, it is taxable in Japan and must be declared.
Sole proprietors and freelancers: If you filed an 開業届 and operate as a sole proprietor, you are responsible for your own tax return regardless of income level. Year-end adjustment does not apply to you.
Medical expense deductions: If your medical expenses exceeded ¥100,000 (or 5% of your income, whichever is lower) in the year, filing allows you to claim the excess as a deduction. This isn't recovered through year-end adjustment.
Furusato nozei above the one-stop limit: If you donated to more than 5 municipalities through furusato nozei and used the one-stop exception system, you must file a tax return to correctly apply the deductions instead.
Filing when you don't have to can get you money back
You're not only required to file in the situations above — you may want to file even when not required if you had significant deductible expenses that weren't captured in year-end adjustment, or if you overpaid tax due to changing employers mid-year. A tax refund application (還付申告) can be filed any time within 5 years and doesn't require the standard February-March window.
Overseas Income — The Situation That Catches People Most Off Guard
Foreign residents in Japan earning income from overseas sources — whether remote work for a foreign company, freelance from overseas clients, or investment income — are the group most likely to be filing incorrectly or not at all. The rules are genuinely complex but the core logic is manageable.
Overseas income paid into a Japanese account is taxable — and visible
International wire transfers into Japanese bank accounts are visible to Japanese tax authorities. Japan's tax system has exchange of information agreements with numerous countries, and banks are required to report large international transfers. The question "will they know?" has been definitively answered: yes, increasingly so. Income received into a Japanese account from an overseas source is taxable and must be declared.
Currency conversion — use the TTM rate on the day you received it
Foreign currency income must be converted to Japanese yen for tax purposes. The correct rate is the TTM (仲値, middle rate) on the date the income was received — not when it was transferred, not when you converted it to yen, and not an average rate for the year. The Bank of Japan publishes TTM rates; the NTA also publishes an annual simplified table of representative currency rates that can be used as an alternative for standard calculations. Using the wrong rate or the wrong date is a common error that creates discrepancies between what you declare and what banks report.
Overseas Dependents — The Documentation That Many People Skip
If you support family members who live outside Japan — parents, siblings, children — you may be entitled to claim a dependent deduction (扶養控除) for them. But the requirements are stricter than for Japan-resident dependents, and skipping the documentation makes the deduction invalid.
Two documents required for overseas dependent deductions
For each overseas dependent: (1) a 親族関係書類 (family relationship document) — a government-issued document from your home country proving the family relationship (birth certificate, family registry, marriage certificate, passport), translated into Japanese; AND (2) a 送金関係書類 (remittance document) — proof that you actually sent living expenses to the dependent during the year, such as a bank transfer record or Wise transfer confirmation showing the dependent's name and the amount. Claiming overseas dependents without both documents is invalid and creates risk at any future tax audit.
The Filing Process — How It Actually Works
The standard filing period is February 16 to March 15 for the previous calendar year. Tax offices (税務署) covering your registered address handle filings. There are three ways to file:
e-Tax (online): Japan's electronic tax filing system. Requires a My Number Card and a compatible card reader, or login via smartphone. Increasingly the most common method. The NTA's website has a guided online form that calculates tax automatically based on what you enter.
In-person at the tax office: Bring all documents, complete the form there or have it pre-completed, submit at the counter. Tax offices set up special dedicated areas during the February-March period specifically for annual filing. Expect queues. Early morning on weekdays is faster than the final week of March.
By mail: Post the completed forms to your local tax office. Must arrive by March 15.
A specific challenge for foreigners: the name on your bank account
Tax refunds are paid by bank transfer to the account you designate. Japanese bank accounts typically hold your name in katakana. If the katakana rendering of your name on your bank account doesn't match what you write on the tax return, the refund transfer can fail. Attach a copy of your bank passbook or a document showing both the account number and the katakana name to avoid this.
Penalties for Not Filing
Not filing when you're required to has two specific penalties. 無申告加算税 (non-filing penalty) adds 15% to the unpaid tax amount, increasing to 20% for amounts above ¥500,000. 延滞税 (late payment penalty) accrues daily at approximately 2.4-8.7% annually depending on how late you are. Both are calculated on top of the original tax owed, not in place of it.
More relevant for foreign residents: unfiled tax returns can show up as compliance issues during visa renewal and permanent residency applications. The February 2026 PR guideline revision explicitly tightened the review of tax compliance records. Filing correctly is not just about avoiding penalties — it's directly connected to your immigration status.
Official Sources
This article references the following primary sources. Rules and figures change periodically — always verify current requirements directly before making decisions.