Exit tax

The exit tax is a form of capital gains tax that applies to people who are moving out of Japan with assets worth 100 million yen or more who have been resident for 5 or more years within the last 10 years.

Exclusions from the 5 year residency calculation

The tax law specifies that residency as a foreign national with an employment-based status of residence is not included in the residency period calculation. This appears to imply that residents who are always resident under an excluded status are not subject to the tax. It also implies that the 5 year timer starts from when you acquire a status that is subject to the tax (as opposed to the tax being applicable immediately). It would be good to get confirmation of these points from an expert.

The table below shows the complete list of the statuses of residence listed in the Immigration Act that are excluded from residency period calculation.

Excluded from calculation of residency period

Included in calculation of residency period

Diplomat Official Professor Artist Religious Activities Journalist Highly Skilled Professional Business Manager Legal/ Accounting Services Medical Services Researcher Engineer / Specialist in Humanities / International Services Intra-Company Transferee Nursing Care Entertainer Skilled Labor Specified Skilled Worker Technical Intern Training Cultural Activities Temporary Visitor Student Trainee Dependent Designated Activities Source: Table 1 of the Immigration Act

All residents without one of the statuses of residence on the left. Including: Japanese National Permanent Resident Spouse or Child of Japanese National Spouse or Child of Permanent Resident Long-Term Resident Source: Table 2 of the Immigration Act + Japanese National.

Considerations when getting Spouse status, Permanent Residency, or Naturalising

People whose immigration status will change from one of the excepted ones to a non-excepted one should consider if it will affect their exit tax liability. For example:

• Converting from a work-based status to Spouse
• Becoming a Long-Term or Permanent Resident
• Naturalisation

will all start the counter for liability for the exit tax.

See also

• PwC summary (2020, Archived PDF)
• KPMG summary (2015, PDF)
• Grant Thornton summary (2022, PDF)
• 国外転出時課税制度 - National Tax Agency (Japanese)
  • Specifically, Q3 from the linked FAQ 国外転出時課税制度（FAQ）（令和元年5月）(Japanese, PDF)
• 国外転出をする場合の譲渡所得等の特例 Tax Answer No.1478 (Japanese)
• Residency for tax purposes