Q: Hello, I’m currently working on a Specialist in Humanities visa. I went to the local tax office and they asked me if I’m a Permanent Resident. I explained my visa type, but there was some confusion. What information do they want?

A: For tax reasons and immigration purposes the term “Permanent Resident” are independent of one another. In other words, it is possible for a foreigner living in Japan to be a permanent resident for tax purposes, while maintaining a visa status other than Permanent Residency (eijyuuken).

For tax purposes residency is divided in to Non-Permanent Resident and Permanent Resident. A Non-Permanent Resident is determined as someone with a domicile or residency in Japan lasting longer than 1 year. A Permanent Resident refers to a Resident who has been in Japan for a period of 5 years or longer, within the past 10 years.

The scope of taxable income differs slightly for Non-Permanent Residents and Permanent Residents. A Non-Permanent Resident is expected to pay tax in Japan on all income generated in Japan. Likewise, a Non-Permanent Resident is expected to pay tax on foreign income that is paid in Japan. Furthermore, a Non-Permanent Resident should pay taxes on foreign income that is paid abroad but remitted to Japan (only the capital gain portion remitted to Japan is taxable).

A Permanent Resident, someone who has lived in Japan for more than 5 years aggregate over the past 10 years, is subject to taxation on all incomes world-wide.

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