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Withholding tax in Japan 2026
Payments to non-residents carry surtax-inclusive withholding: 20.42% on employment for Japan workdays, professional fees, royalties, rents and unlisted dividends; 15.315% on listed dividends and deposit or bond interest.
Book-entry government and qualifying corporate bonds are exempt with paperwork, and Japan's treaties frequently drop the passive rates to 10% or below.
At a glance
- top rate
- 20.42%
- entry band
- 0% on book-entry government bonds (with forms)
- tax year basis
- Withheld when paid
- filing deadline
- Final for passive income; returns for rents and property sales
- residency basis
- Japan-source payments to non-residents
- regime flag
- Property-sale proceeds: 10.21% withheld on account
Rates
Withholding on non-residents (2026, surtax included)
| Rate | Base | Applies to |
|---|---|---|
| 20.42% | Gross | Employment for Japan workdays, directors' fees, professional services, royalties, silent-partnership distributions |
| 15.315% | Gross | Listed-share dividends; interest on deposits and bonds |
| 20.42% | Gross | Unlisted dividends; loan interest to Japanese businesses; real estate rents (net filing follows) |
| 10.21% | Sale proceeds | Japanese real estate sales — on account against 15.315%/30.63% final rates |
| 0% | — | Book-entry government, municipal and qualifying corporate bonds (with application forms) |
| 15.315% | Gain | Substantial-stake share sales (25% held / 5% sold) and real-estate-rich companies — by return |
Thresholds & allowances
- Treaty safe harbour183 days
Standard treaty exemption for short-stay employment paid by foreign employers
- Retirement-allowance electionResident-style computation
Non-residents may elect the 50%-inclusion retirement treatment — at the cost of worldwide inclusion of the allowance
Residency
Residency trigger
Japanese payers withhold with the 2.1% surtax baked in; compensation paid abroad for Japan services must be self-declared by return.
Non-resident treatment
Pensions are usually treaty-assigned to the residence country; inhabitant tax skips non-residents except per-capita charges on permanent establishments.
Notes
- Directors of Japanese companies are Japan-source taxed on their fees wherever they work — no workday allocation.
- Rental withholding (20.42%) is an advance: the annual return taxes net rental income at progressive rates with a credit.
- Non-resident tax returns for unwithheld employment income can be filed any time up to the 15 March deadline of the next year.
FAQ
What does Japan withhold on payments abroad?
20.42% on most gross income — salaries for Japan workdays, royalties, professional fees, unlisted dividends — and 15.315% on listed dividends and interest, with treaty reductions common.
How are non-resident property owners taxed?
Tenants withhold 20.42% of rent and buyers withhold 10.21% of sale proceeds — both on account, squared up in a return where rents are taxed net and gains at 15.315% (30.63% under 5 years' ownership).
Figures: tax year 2026, compiled from public sources. Not tax advice.