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Exit Tax in Japan: What the Departure Tax Requires | MyKyoten

If you leave Japan without knowing whether the exit tax applies to you, you could owe millions of yen in tax on investments you have not even sold yet.

Last verified: 2026. This guide is based on Immigration Bureau regulations, Ministry of Health Labour and Welfare guidelines, and standard Japanese administrative practice. It is informational only and does not constitute legal advice. Consult a licensed immigration attorney or official government sources for case-specific guidance.
This explains how the system works. It is not investment advice and does not recommend any specific product, fund, or strategy. Consult a licensed financial advisor for guidance specific to your situation.

If you leave Japan without knowing whether the exit tax applies to you, you could owe millions of yen in tax on investments you have not even sold yet, and the filing deadline is the day you depart.

What exactly is this exit tax and why does Japan charge it?

Japan's exit tax (国外転出時課税) was introduced in 2015. The core logic: wealthy residents were leaving Japan and then selling their appreciated assets abroad, paying zero Japanese tax on gains that accumulated while they lived in Japan. The government closed that gap by treating your departure as a deemed disposal.

On the day you leave, Japan calculates as if you sold every qualifying financial asset at its current market price. You owe income tax on any unrealized gains above your original acquisition cost, even though you have not actually sold anything.

The threshold is ¥100 million in total qualifying assets. This is the combined fair market value of all covered assets on your departure date, not your profit.

Assets that are explicitly excluded:

The distinction matters because many long-term foreign residents hold Japan real estate but keep their securities offshore. Your ¥200 million apartment does not trigger exit tax. Your ¥120 million brokerage account does.

→ Use the Document Decoder to translate and understand your Japanese administrative documents.

Who actually gets hit by this rule?

Residency duration is the core test, not nationality.

You are subject to exit tax if you have lived in Japan for a total of 10 or more years within the last 15 years before your departure date. Years on tourist visas, short-term stays, or periods where you held a status of residence but were physically abroad for most of the year may or may not count. This is an area where a tax accountant's calculation matters.

Foreigners on work visas who held a Japan address through the municipal registration system (住民票) are generally counted toward that 10-year threshold.

Temporary departure is treated very differently from permanent departure. If you leave Japan intending to return within 5 years and your assets stay with a Japanese securities firm managed by a tax representative (納税管理人), the exit tax is suspended. The moment you formally cancel your residence registration or your period of stay expires without renewal, you are in permanent departure territory.

Exemptions and deferrals for foreigners moving to treaty countries: If you relocate to a country that has a tax treaty with Japan that includes a provision covering departure taxation (Germany, the United States, France, Australia, and others), you can apply for a 5-year payment deferral rather than paying on departure day. This requires appointing a tax representative before you leave and, for large amounts, posting collateral.

[Reality Check] Many foreign residents in Japan assume the exit tax is only a concern for Japanese nationals with family wealth. That assumption is wrong. A foreigner who joined a Japanese tech company on an Engineer visa at age 30, received stock options as part of compensation, saw those options vest and appreciate significantly over 11 years, and now holds ¥130 million in listed shares in a Japanese brokerage account, that person is fully in scope. The nationality column on your residence card is irrelevant to the tax authority.

How do you actually file, and what is the hard deadline?

The exit tax is reported through a standard income tax return (確定申告), but the timeline is compressed compared to normal tax filing.

1. Determine your departure date. This is your valuation date. 2. Obtain the closing market price for every qualifying asset on that date. Your securities firm will typically provide a balance statement but will not automatically calculate your unrealized gains or prepare a tax filing document. 3. Calculate the deemed disposal gain: market value on departure date minus original acquisition cost (取得価額) for each asset. 4. Total the gains across all assets. Apply the applicable income tax rate (currently 20.315% for listed securities gains in Japan, combining national income tax, reconstruction surtax, and resident tax). 5. Submit the 確定申告 either by your departure date directly, or through an appointed tax representative (納税管理人) who files by the normal March 15 deadline of the following year.

The deadline is not forgiving. If you depart without appointing a tax representative and without filing, you are in violation. Late filing penalties apply: a delinquency surcharge of 15% of unpaid tax (rising to 20% above a certain threshold) plus daily interest charges from the due date.

For reference: a ¥100 million portfolio with an average unrealized gain of 40%, so ¥40 million in taxable profit, generates approximately ¥8.1 million in exit tax at the 20.315% rate.

What does deferral actually cost you, and how does collateral work?

The 5-year deferral option exists but it is not free of friction.

[Step-by-Step Checklist: Deferral Process]

What happens if you sell during deferral? Say you deferred ¥8 million in exit tax. In year 2, you sell half the portfolio. You owe half the deferred amount immediately: ¥4 million, payable within 4 months of the sale.

What to actually do in the weeks before your flight

Leaving Japan involves more administrative deadlines than most people plan for. The exit tax adds a layer that requires action weeks, not days, before departure. For a broader overview of what to resolve before you go, the Leaving Japan Calculator covers the full departure timeline including tax, pension, and insurance obligations.

What-if scenario 1: A Canadian software engineer on a Highly Skilled Professional visa has held Japan-registered investment trust accounts for 9 years and 8 months. Her total portfolio value is ¥95 million. She is not in scope for exit tax. She is below both the 10-year threshold and the ¥100 million asset threshold. But she should obtain written confirmation from a tax accountant before departure, because even a short period counted incorrectly could push her over 10 years.

What-if scenario 2: A British fund manager on a Business Manager visa has held Japanese listed stocks worth ¥180 million with a cost basis of ¥90 million. He is relocating to Singapore, which does not have a tax treaty with Japan covering departure taxation. He cannot use the treaty-based deferral. The full exit tax on ¥90 million in gains, approximately ¥18.3 million, is due by his departure date or must be arranged through a tax representative filing by March 15.

[Warning Box] Your securities firm will not warn you about exit tax. They are required to provide balance statements but have no obligation to calculate your liability or remind you to file. Reports from foreign residents consistently describe discovering exit tax obligations late, sometimes after the departure date has passed. Do not wait for your broker to flag this.

Regarding immigration records: if you depart Japan with unresolved exit tax obligations, the National Tax Agency can share information with immigration systems. Future applications for re-entry, visa extensions, or permanent residency in Japan may be affected by unresolved tax compliance issues.

Your next step: At least 8 weeks before your planned departure date, contact a licensed tax accountant (税理士) experienced in international taxation, pull your full securities account statements showing acquisition cost and current value for every asset, and determine your total market value against the ¥100 million threshold. If you are over the threshold and have lived in Japan for 10 or more of the last 15 years, begin the tax representative appointment process immediately. The paperwork takes time.

Does exit tax apply if I am moving temporarily and plan to return to Japan? If you return to Japan as a resident within 5 years and your assets were managed by a Japanese tax representative during your absence, the exit tax liability is canceled retroactively. You must have filed for the deferral before departing and maintained the tax representative appointment continuously throughout the absence period.

My assets are held at a foreign brokerage, not in Japan. Does exit tax still apply? Yes. The exit tax applies to qualifying financial assets regardless of where they are held. Foreign-held listed stocks, investment trusts, and similar instruments count toward the ¥100 million threshold if you meet the 10-year residency test. The location of the brokerage account does not change your liability.

What if my portfolio drops in value after I leave? Do I get a refund? If assets are sold after departure at a loss relative to the deemed disposal value used for exit tax calculation, you can file an amended return to claim a refund of the excess tax paid. This requires filing within the statute of limitations and is subject to specific procedural requirements. A tax accountant should handle this calculation.

Before you finalize your departure plans, use the Leaving Japan Calculator at mykyoten.com. It walks through the full financial and administrative checklist for people leaving Japan, including tax obligations, pension lump-sum refund windows, and insurance cancellation deadlines, so you can see exactly what needs to be resolved before your flight, in the right order.