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Hello everyone!

For foreigners living in Japan, the taxation system and preferential treatment are probably a point of concern.

Japan has a tax incentive system for foreign students, short-term residents and foreigners with certain skills, which can reduce your tax burden if you meet the applicable conditions.

However, in order to make good use of the system, it is essential to understand the detailed conditions and procedures.

This article introduces the specific details and application methods of the tax benefit system for foreigners in an easy-to-understand series.

5. Future and latest developments in the tax incentive system for foreigners
The preferential tax treatment system for foreigners is being expanded against the backdrop of international competition for human resources and industrial development, and further revisions and expansion of the scope of application are expected in the future.

Latest amendments to tax incentives for foreign nationals
In recent years, Japan's preferential tax treatment of foreigners has been revised and expanded, particularly to benefit highly-skilled foreigners and foreign workers in certain industries.

For example, in response to international competition for human resources, preferential tax treatment now applies to foreigners with advanced knowledge and skills in certain specialised fields. This includes, for example, tax exemptions or increased deductions for certain income in Japan, and is a measure to help alleviate labour shortages in specialised occupations.

Amendments have also been made to reduce the tax burden on short-term residents who work in Japan only for a certain period of time, and tax exemptions on foreign income are increasingly being applied to short-term expatriates and trainees.

This change is expected to reduce the burden on foreigners living in Japan, as the scope of tax exemption will be expanded if certain conditions of stay are met.

On the other hand, prior confirmation of conditions and necessary procedures are required to make use of the latest preferential treatment, so it is recommended to seek support from the tax office or a specialist when applying.

6. Summary
Understanding the tax incentive system for foreigners is important knowledge for foreigners considering living in Japan and for Japanese people looking to live abroad.

Japan has introduced preferential tax treatment for foreign nationals, and certain conditions may entitle them to income tax relief or exemptions. In particular, if you are a foreign student, a technical intern or a short-term professional, tax exemptions and tax breaks are often available, making it easier for you to concentrate on your studies or work.

However, it is essential to check the application procedures and conditions for application. In addition, as the tax burden differs greatly depending on the residence category and tax treaty, it is important to understand the details of the system in advance and take the appropriate measures for your situation.

Tax points when a foreign worker resigns or returns home
When a foreign worker resigns or returns home in the middle of the year, the following points need to be considered.

When retiring
Basically, choose the ‘lump-sum collection’ option, whereby unpaid inhabitant tax is deducted from the salary or retirement allowance and paid to the municipality.

Foreign workers can also choose to pay the tax in four installments per year and pay it directly to the local municipality.

Returning home
If the resident tax cannot be paid by the time of return, a tax payment manager is selected* Tax payment managers can be corporate or individual.

It is necessary to submit a ‘Notification of Appointment/Dismissal of Tax Payment Manager for Income Tax and Consumption Tax’ to the tax office with jurisdiction over your address.

When changing or dismissing a tax payment manager, a new procedure is required.

We often hear that there are cases where a tax administrator suddenly disappears before the date of retirement, but to avoid inconveniencing your employer, and to ensure that you follow the proper procedures and check your tax affairs.

Please make sure that you also check this when you retire.



The choice is important for all foreigners.

Check the conditions carefully and protect your assets to avoid any losses.

Stay tuned for next week!


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