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Japan tax guide 2026
Japan's income tax stacks three layers — a 5–45% national scale, a 2.1% reconstruction surtax on it, and a flat 10% local inhabitant tax — reaching about 56% at the top. Investors live in a gentler world: listed dividends and share gains pay a flat 20.315%, and the expanded Nippon Individual Savings Account (NISA) shelters up to JPY 18 million for life. The counterweight is one of the world's toughest inheritance taxes, up to 55%.
- Rate range
- 5% – 45% national (+2.1% surtax) + 10% inhabitant ≈ 56% top
- Key allowance
- Basic deduction JPY 620,000 from 2026 (up to 1.04 million for modest incomes in 2026–27)
- Tax year
- Calendar year
- Filing deadline
- 16 February – 15 March; most employees settled by year-end adjustment
Taxes covered
- Income tax≈ 56%
National 5–45% plus the 2.1% reconstruction surtax and a flat 10% inhabitant tax — 55.945% combined at the top.
- Dividend tax20.315%
Listed dividends elect a flat 20.315% (15% national x surtax + 5% inhabitant); Nippon Individual Savings Account (NISA) holdings make them 0%; unlisted dividends ride the progressive scale with a credit.
- Capital gains tax20.315% / 39.63%
Shares always 20.315%; property 20.315% after 5 years' ownership but 39.63% within it — with a JPY 30 million deduction on selling your home.
- Crypto taxup to ≈ 55%
Crypto profits are miscellaneous income at full progressive rates — the planned 20.315% flat regime for exchange-traded crypto is expected around 2028, not yet law.
- Social security≈ 15%
Employees pay roughly 15% — 9.15% welfare pension, ~5% health (5.7% from age 40), 0.5% unemployment (from April 2026) — on capped standard remuneration.
- Inheritance tax55%
10–55% on statutory shares above a basic exemption of JPY 30 million + 6 million per heir — among the world's heaviest, with a 10-year expatriate tail.
- Withholding tax15.315% / 20.42%
Non-residents: 20.42% on most gross income (salary, royalties, unlisted dividends), 15.315% on listed dividends and bond interest — treaties cut heavily.
Special regimes
- 20.315% investor rate
Listed dividends, share gains and long-held property sales are taxed at a flat 20.315% — far below the 56% top salary rate.
- NISA wrapper
Invest up to JPY 3.6 million a year (JPY 18 million lifetime) with all dividends and gains permanently tax-free; a child NISA arrives under the 2026 reform.
- Non-permanent resident status
Foreigners resident under 5 of the past 10 years pay Japanese tax only on Japan-source income and foreign income paid into or remitted to Japan.
- 55% inheritance tax
Estates above JPY 600 million per statutory share face 55% — with a 10-year tail that can follow Japanese-connected families abroad.
Recent changes
- 2026-01The 2026 reform lifts the basic deduction to JPY 620,000 (with add-ons reaching JPY 1.04 million for modest earners in 2026–27), raises the minimum salary deduction, and tightens the ultra-rich minimum tax from 2027 to 30% above JPY 165 million.
- 2025-12The reform outline schedules a move of exchange-traded crypto to 20.315% separate taxation (with 3-year loss carryforward), expected from 2028 once securities-law amendments pass.
- 2024-01NISA became permanent and expanded (JPY 2.4m growth + 1.2m funded annually, JPY 18m lifetime); the inheritance gift-clawback window began extending from 3 toward 7 years.