Tax residence in Japan for U.S. citizens and green card holders

Japan has no day-count test: you are a resident if the base of your life (domicile) is in Japan or you have had a residence there continuously for one year or more, and you are presumed to have a domicile from arrival if you come for an occupation that normally requires living in Japan for one year or more. A resident without Japanese nationality who has lived in Japan 5 years or less in total within the past 10 years is a non-permanent resident, taxed on foreign-source income only if it is paid in Japan or remitted there. The United States taxes its citizens and green card holders as residents wherever they live, but under Art. 4(2) of the Japan–U.S. Convention (2003, amended by the 2013 Protocol) a U.S. citizen or green card holder who is a resident of Japan is not a U.S. resident for treaty purposes. Everyone else is tested under Art. 4(3): permanent home, center of vital interests, habitual abode (also with a permanent home in neither country), nationality, then mutual agreement. The saving clause (Art. 1(4)(a)) still lets the United States tax its citizens, with special credit rules in Art. 23(3).

Free, no sign-up, about 3 minutes. Conclusion under U.S. law, compared with the law of Japan and the tax treaty.

When Japan treats you as a tax resident

A Japanese resident is an individual with a domicile (the base of life) in Japan or with a residence in Japan continuously for one year or more. Japan has no day-count test. Nationality matters only for the deeming rule for public servants and for the non-permanent resident category.

A person who takes up an occupation abroad that normally requires living abroad continuously for one year or more is presumed not to have a domicile in Japan. An employee transferred to an overseas branch — for example in the United States — for a planned year or longer generally falls under this rule.

Domicile is the base of your life, determined by objective facts — residence, occupation, location of assets, where your relatives live, nationality — and not by the number of days alone.

A person without Japanese nationality who takes up an occupation in Japan that normally requires living there for one year or more is presumed to have a domicile in Japan; a person who has had a residence in Japan continuously for one year or more is also resident.

• As a Japanese national or local public servant you are deemed to have a domicile in Japan even while working abroad without one (Income Tax Act art. 3). You are a Japanese resident taxed on all income arising in and outside Japan.
• The base of your life (domicile) is in Japan. Under art. 2(1)(iii) of the Income Tax Act you are a Japanese resident (not a non-permanent resident) taxed on all income arising in and outside Japan.
• You have lived in Japan continuously for one year or more, or you are presumed to have a domicile there because your occupation requires living in Japan for one year or more (art. 2(1)(iii) of the Income Tax Act; Enforcement Order art. 14). You are a Japanese resident taxed on all income arising in and outside Japan.
• You have a domicile in Japan or have lived there for one year or more, you do not have Japanese nationality, and your total time of domicile or residence in Japan in the past 10 years is 5 years or less, so you are a «non-permanent resident» (art. 2(1)(iv)). Japan taxes your income other than foreign-source income, and foreign-source income — for example from the United States — only if it is paid in Japan or remitted to Japan.
• You have a domicile in Japan or have lived there for one year or more, and your total time of domicile or residence in Japan in the past 10 years exceeds 5 years, so you are a resident other than a non-permanent resident. Even without Japanese nationality, Japan taxes all your income arising in and outside Japan.
• You are a Japanese resident. If your total time of domicile or residence in Japan in the past 10 years is 5 years or less, you are a non-permanent resident (foreign-source income taxed only if paid in Japan or remitted there); if it exceeds 5 years, all income is taxable. Check the periods from your entry and departure dates.

When you are a nonresident

• You have an occupation abroad that normally requires living outside Japan continuously for one year or more, so you are presumed not to have a domicile in Japan (Enforcement Order art. 15). As a non-resident you are taxed in Japan only on Japan-source income. The presumption can be rebutted by the facts.
• The base of your life is not in Japan and you have not lived there continuously for one year or more. As a non-resident you are taxed in Japan only on Japan-source income (Income Tax Act art. 2(1)(v), art. 7).

Where the rules of Japan clash with U.S. tax rules

• Collision: U.S. citizen resident in Japan — Japan is your treaty residence, the U.S. still taxes you. Under Art. 4(2) of the Japan–U.S. Convention a U.S. citizen who is a resident of Japan under Japanese law is not a U.S. resident for treaty purposes, so Japan is your state of residence. The saving clause (Art. 1(4)(a)) still lets the United States tax you as a citizen on worldwide income. Double taxation is coordinated by Art. 23(3): Japan credits only the U.S. tax that the U.S. could charge if you were not a citizen (for example on U.S.-source dividends at the treaty rate), and the United States credits the Japanese tax remaining after that, treating the income as arising in Japan to the extent needed.
• Green-card holder resident in Japan: Art. 4(2) and its U.S. cost. A green card makes you a U.S. resident regardless of days, but under Art. 4(2) of the Convention a green-card holder who is a resident of Japan is not a U.S. resident for treaty purposes. To use that in the U.S., you file as a nonresident (Form 1040-NR with Form 8833) and remain a U.S. resident for other purposes (Treas. Reg. § 301.7701(b)-7). If you held the green card in 8 of the last 15 tax years, the claim ends your permanent-resident status for tax purposes (§ 7701(b)(6)) and can trigger the expatriation tax (§ 877A). The green card lasts until formally abandoned (Form I-407).
• Collision: Japanese residence from arrival for a job of a year or more. If you come to Japan for an occupation that normally requires living there for one year or more, Japan presumes a domicile in Japan from your arrival — there is no minimum number of days (Enforcement Order art. 14). In the same calendar year you may still be a U.S. resident. For a U.S. citizen or green-card holder, Art. 4(2) of the Convention makes Japan the treaty residence; for others, Art. 4(3) applies (permanent home, centre of vital interests, habitual abode, nationality, mutual agreement).

What else to know

• Which treaty applies: the 2003 Japan–U.S. Convention as amended in 2013. The Convention signed at Washington on 6 November 2003 (in force 30 March 2004) applies, as amended by the Protocol signed on 24 January 2013 (in force 30 August 2019); the United States is not a party to the MLI. Residence: Art. 4(2) has a special rule for U.S. citizens and green-card holders (they are U.S. residents for treaty purposes only if they are not residents of Japan); everyone else is tested under Art. 4(3) — permanent home → centre of vital interests → habitual abode (also with a home in neither country) → nationality → mutual agreement. Saving clause: Art. 1(4); employment: Art. 14 (183 days in any 12-month period); pensions: Art. 17; relief: Art. 23 (with special rules for U.S. citizens in Art. 23(3)); mutual agreement: Art. 25.
• No day test in Japan; calendar year in both countries. Japan has no day-count test: you are resident if the base of your life (domicile) is in Japan or you have lived there continuously for one year or more, and Japanese income tax is computed for the calendar year. The United States also uses the calendar year, with the substantial presence test for non-citizens without a green card. The 183-day limit for salary in Art. 14(2)(a) of the Convention counts days in any twelve-month period commencing or ending in the taxable year concerned.
• Non-permanent resident: U.S. income taxed in Japan only if paid or remitted there. As a non-permanent resident of Japan you are taxed there on foreign-source income — for example salary for work done in the United States, rent from U.S. property or interest on U.S. accounts — only to the extent that it is paid in Japan or remitted to Japan; the foreign tax credit is limited to that part too. The United States still taxes its citizens and residents on worldwide income. Once your domicile or residence in Japan exceeds 5 years in total within 10 years, Japan taxes your worldwide income.
• How Japan and the U.S. relieve double taxation. If Japan is your state of residence, you report U.S. income in your Japanese return and credit the U.S. federal income tax against Japanese income tax under Japanese law, up to the Japanese tax attributable to that income, with a 3-year carry-forward (Art. 23(1); art. 95 of the Income Tax Act); for U.S. citizens the special rules of Art. 23(3) apply. The United States credits Japanese tax for its residents and citizens (Art. 23(2)); the U.S. foreign tax credit is covered in the U.S. section. Whether Japan credits U.S. state income tax was not verified.
• Working in Japan while resident in the U.S.: the 183-day rule (Art. 14(2)). Pay for work physically done in Japan is Japan-source. If the United States is your treaty residence, Japan does not tax it only if all conditions of Art. 14(2) of the Convention are met: not more than 183 days in Japan in any twelve-month period commencing or ending in the taxable year concerned; an employer that is not resident in Japan; and pay not borne by a permanent establishment of the employer in Japan. Otherwise Japan withholds or assesses tax on the pay for your Japan work days and the United States credits it (Art. 23(2)).
• Leaving Japan for the U.S.: non-resident from the day after departure. If you are transferred to the United States for a year or more, Japan presumes that you have no domicile in Japan (Enforcement Order art. 15) and you are usually a non-resident from the day after departure. For the year of departure you declare all income up to departure plus Japan-source income afterwards — by 15 March of the next year if you appointed a tax agent, otherwise by the time you leave. The inhabitant tax is charged by the municipality where you lived on 1 January, so it is due for the year you leave. Afterwards Japan taxes only Japan-source income, and the United States credits that Japanese tax (Art. 23(2)).
• Year of arrival or departure: Japan splits the year into resident and non-resident periods. Japanese residence starts when you acquire a domicile in Japan — for a job of a year or more, from arrival — or on the day after one year of residence, and ends on departure; the income of that year is divided into a resident period and a non-resident period. A U.S. citizen is taxed by the United States for the whole year. Overlapping periods of residence are resolved under Art. 4 of the Convention.
• Japanese exit tax: leaving with securities of ¥100 million or more. If, when you leave Japan, you hold securities etc. worth ¥100 million or more and had a domicile or residence in Japan for more than 5 years in the 10 years before departure, Japan taxes the unrealised gains as if you had sold them (Income Tax Act art. 60-2). Payment can be deferred for 5 years (up to 10) if you appoint a tax agent and provide security, and the tax is cancelled if you return within that period. Check with an adviser how the U.S. taxes a later sale and whether the Japanese tax can be credited.
• Pensions and social security benefits: generally taxed in the country of residence. Under Art. 17(1) of the Convention, pensions and similar remuneration, including social security benefits, are taxable only in the recipient's country of residence. Art. 17(1) is not among the exceptions to the saving clause (Art. 1(5) lists only Art. 17(3)), so the United States can still tax a U.S. citizen resident in Japan on these payments.
• Social security: U.S.–Japan agreement in force since October 2005. The U.S.–Japan social security agreement has been in force since 1 October 2005 and lets coverage periods be totalised. It covers Japan's public pension and public health insurance and U.S. Social Security and Medicare. An employee sent by an employer from the United States to Japan for five years or less stays in the U.S. system with a U.S. certificate of coverage (form USA/J 6) and is exempt from Japanese contributions; an employee sent from Japan to the United States for five years or less likewise stays in the Japanese system with a Japanese certificate (form J/USA 6).

How dual residence is resolved

If both countries treat you as a resident, Art. 4(2)–(3) of the treaty applies: Convention between the Government of the United States of America and the Government of Japan for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income (signed at Washington on 6 November 2003), as amended by the Protocol signed on 24 January 2013. The tests are applied in order — permanent home, center of vital interests, habitual abode, nationality, and finally mutual agreement between the tax authorities. U.S. citizens remain taxable in the United States under the saving clause.

Terms you will come across in Japan

住所 (jūsho)

domicile — the base of your life, judged by objective facts

居所 (kyosho)

residence; one year of continuous residence in Japan makes you a resident

居住者 (kyojūsha)

resident, taxed on all income arising in and outside Japan

非永住者 (hi-eijūsha)

non-permanent resident — no Japanese nationality and 5 years or less in Japan within the past 10 years

確定申告 (kakutei shinkoku)

final income tax return, filed 16 February – 15 March of the following year

納税管理人 (nōzei kanrinin)

tax agent a non-resident appoints for filings in Japan

Questions

Sources

Legislation and official guidance

• Income Tax Act (Japan), art. 2(1)(iii)–(v) — Resident: an individual who has a domicile in Japan, or who has had a residence in Japan continuously for one year or more up to the present. Non-permanent resident: a resident who does not have Japanese nationality and has had a domicile or residence in Japan for a total of 5 years or less within the past 10 years. Non-resident: an individual other than a resident.
• Income Tax Act (Japan), art. 3 — National and local public servants (excluding those without Japanese nationality and others specified by Cabinet Order) are deemed to have a domicile in Japan even for periods in which they have no domicile in Japan. Matters needed to determine domicile are prescribed by Cabinet Order.
• Order for Enforcement of the Income Tax Act, art. 15 — An individual who has come to live outside Japan is presumed not to have a domicile in Japan if (1) he or she has an occupation that normally requires living abroad continuously for one year or more, or (2) he or she has a foreign nationality or foreign permanent residence permit and there are no facts — such as relatives sharing living expenses in Japan — suggesting a return to live mainly in Japan. Family members living with that person and sharing living expenses are treated the same.
• NTA Tax Answer No. 1926 (law as of 1 April 2026) — An employee of a Japanese company transferred to an overseas branch for a planned period of one year or more is generally presumed not to have a domicile in Japan and becomes a non-resident. In the year of departure, if a tax agent is appointed, all income of the resident period and Japan-source income of the non-resident period are declared between 16 February and 15 March of the following year; without a tax agent, a final return is filed by the time of departure. Rent from Japanese real estate is in principle subject to 20.42% withholding.
• Basic Circular on Income Tax 2-1 to 2-4 — Domicile means the base of a person's life and is determined by objective facts (2-1). Where the purpose of going abroad is clearly temporary (a spouse left in Japan, a home kept for living in after return, etc.), the person is treated as keeping a residence in Japan while abroad (2-2). A person with no domicile on entry is a non-resident until the day one year after entry and a resident from the following day (2-3). The «one year» is counted from the day after the day of entry (2-4).
• NTA Tax Answer No. 2012 (law as of 1 April 2026) — Whether the base of life is in Japan is decided by objective facts such as residence, occupation, location of assets, where relatives live and nationality. It is not decided by days of stay alone, so a person can be a Japanese resident even after staying abroad for 183 days or more. A person resident of both countries is assigned by the tax treaty, with mutual agreement between the authorities where necessary.
• Order for Enforcement of the Income Tax Act, art. 14 — An individual who has come to live in Japan is presumed to have a domicile in Japan if (1) he or she has an occupation that normally requires living in Japan continuously for one year or more, or (2) he or she has Japanese nationality and a spouse or other relatives sharing living expenses in Japan, or other facts suggesting continuous residence in Japan for one year or more. Family members living with that person and sharing living expenses are treated the same.
• Income Tax Act (Japan), arts 5 and 7; NTA Tax Answer No. 2010 — Residents other than non-permanent residents are taxed on all income arising in and outside Japan. Non-permanent residents are taxed on income other than foreign-source income and on foreign-source income paid in Japan or remitted from abroad. Non-residents are taxed only on Japan-source income.
• Art. 4(2) of the Japan–U.S. Convention
• Art. 4(3) of the Japan–U.S. Convention
• Art. 1(4)–(5) of the Japan–U.S. Convention (saving clause)
• Art. 23 of the Japan–U.S. Convention
• § 7701(b)(3)(A); Treas. Reg. § 301.7701(b)-1(c)
• Art. 14(2) of the Japan–U.S. Convention
• Treas. Reg. § 301.7701(b)-7; 26 U.S.C. § 6114
• 26 U.S.C. § 7701(b)(6)
• 26 U.S.C. § 877A(a)(1), (g)(1)–(5)
• Income Tax Act (Japan), art. 95; NTA Tax Answer No. 1240 — A resident who pays foreign income tax deducts it from Japanese income tax up to the credit limit (income tax for the year × adjusted foreign income ÷ total income); the excess is credited up to the limit for special reconstruction income tax. Unused limits and excess credits carry forward for 3 years. For non-permanent residents only foreign income paid in or remitted to Japan counts. Tax above the treaty rate is not creditable. A statement of foreign tax credit and documents proving the foreign tax are attached to the return.
• Income Tax Act (Japan), arts 161, 212, 213; NTA Tax Answer No. 2884 — Payers of Japan-source income to non-residents withhold tax: 20.42% on salary and other remuneration for personal services, retirement allowances, real estate rent, loan interest and royalties; 15.315% on dividends and interest on listed shares. Treaty reduction or exemption is claimed by filing the «Application Form for Income Tax Convention» through the payer by the day before payment.
• Ministry of Internal Affairs and Communications — Individual inhabitant tax — Individual inhabitant tax is levied on persons with a domicile in a municipality (prefecture) on 1 January of the year. The income levy is 10% (4% prefectural, 6% municipal) of the previous year's income (1 January – 31 December); the per-capita levy is a fixed amount. Employees' tax is normally deducted from salary.
• Income Tax Act (Japan), art. 60-2; NTA Tax Answer No. 1478 — A resident who on departure holds securities etc. worth ¥100 million or more and had a domicile or residence in Japan for more than 5 years in total within the 10 years before departure is taxed on the unrealised gains (exit tax). Payment can be deferred for 5 years (extendable to 10) by appointing a tax agent and providing security; the tax can be cancelled on return within that period (claim within 4 months of return).
• Art. 17(1) of the Japan–U.S. Convention
• SSA — U.S.–Japan Social Security Agreement (pamphlet) — Agreement effective 1 October 2005. An employee whose employer sends him or her from the U.S. to Japan, or from Japan to the U.S., for five years or less stays covered by the home country and is exempt in the other; the certificate of coverage (USA/J 6 issued by SSA, J/USA 6 issued in Japan) proves the exemption.
• SSA — U.S. international social security agreements (status)
• Japan Pension Service — social security agreements: dates of entry into force and systems covered
• Japan Pension Service — avoiding dual coverage (workers posted to Japan)
• Income Tax Act (Japan), art. 89; NTA Tax Answer No. 2260 — Seven brackets on taxable income: 5% (under ¥1.95 million), 10% (under ¥3.3 million), 20% (under ¥6.95 million), 23% (under ¥9 million), 33% (under ¥18 million), 40% (under ¥40 million), 45% (¥40 million or more). For 2013–2037, special reconstruction income tax of 2.1% of the base income tax is also payable. The special defence income tax of the 2026 reform applies from 2027 (total rate unchanged).
• Income Tax Act (Japan), arts 120–121; NTA Tax Answer No. 1900 — Most employees' tax is settled by the year-end adjustment and no final return is needed; a final return is required, for example, for annual salary over ¥20 million, other income over ¥200,000, or salary from a payer with no Japanese withholding obligation.
• Act on Submission of Statement of Overseas Wire Transfers, art. 5; NTA Tax Answer No. 7456 — A resident (other than a non-permanent resident) holding foreign assets worth more than ¥50 million in total on 31 December files a statement of foreign assets with the tax office by 30 June of the following year; failure increases penalty tax and can be punished.
• Art. 23 of the Japan–U.S. Convention (relief from double taxation) — Para. 1: Japan credits U.S. tax on income a Japanese resident derives that may be taxed in the U.S., up to the Japanese tax on that income. Para. 2: the United States credits Japanese tax for its residents and citizens. Para. 3: where the U.S. taxes a citizen under Art. 1(4), (a) Japan credits only the U.S. tax the U.S. could levy if the person were not a citizen, (b) the U.S. credits the Japanese tax remaining after (a), without reducing the U.S. tax credited in Japan, and (c) the income is deemed to arise in Japan to the extent needed for the U.S. credit.

Case law

• Supreme Court of Japan, Second Petty Bench, 平成20年(行ヒ)第139号, 2011-02-18 — A gift-tax case on «domicile» (former Inheritance Tax Act art. 1-2(1)). A person posted to Hong Kong who spent about two thirds of the posting period there was held not to have a domicile in Japan when the gift was received, even though he spent about a quarter of the period in Japan, worked in Japan as well and adjusted his days in Japan to avoid tax. A tax-avoidance purpose alone does not place a domicile in Japan.

Updated 2026-11-04. The result is for information only and is not tax or legal advice. Tax authorities and courts may interpret the rules differently, including because of circumstances not covered here, and the law changes. Consult a qualified adviser before making decisions.

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