A gift from home can be tax-free in Japan.
Or it can cost you a third.
Japan has a rule that shields recent arrivals from tax on money and property from abroad. Whether it actually protects you does not depend only on you — it depends on who is giving, and how long you have both been here.
Get the timing wrong and the same ¥30 million gift goes from ¥0 to roughly ¥10.35 million in tax.
The short version
- If you have lived in Japan 10 years or less (of the past 15) on a standard work visa, gifts and inheritance from abroad can be tax-free.
- But the protection only holds if the giver is also a foreign national abroad or in Japan — a long-term-resident Japanese spouse does not qualify, even though you personally do.
- Getting permanent residency ends this protection immediately, regardless of how long you have been planning a transfer.
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What Japan actually taxes
Japan's inheritance and gift tax law sorts every recipient into one of three categories, and the category decides whether foreign-held assets are in scope at all.
| Category | Domestic-situs assets | Foreign-situs assets |
|---|---|---|
| Unlimited taxpayer (mugensei nozei-gimusha) | Taxed | Taxed |
| Temporary resident (ichiji-kyojusha) — limited taxpayer only where the giver also qualifies (see below) | Taxed | Not taxed — otherwise taxed |
| Non-resident, limited taxpayer | Taxed | Not taxed |
The second row is where most foreign professionals in Japan actually sit, and it is the one worth understanding in detail — because losing it is easy to do without noticing.
The test: your visa category, and 10 years out of 15
Under Article 1-4, paragraph 3, item 1 of the Inheritance Tax Act, a temporary resident is someone who, at the time property is received, holds a status of residence under Table 1 (Beppyo Ichi) of the Immigration Control Act — standard work and study categories such as Engineer/Specialist in Humanities/International Services, Business Manager, or Highly Skilled Professional — and whose aggregate period holding an address in Japan within the preceding 15 years totals 10 years or less (the statute counts a registered address — jūsho — not mere physical presence).
Meet both conditions — and receive from a giver who also qualifies (see the next section) — and foreign-situs assets you receive are outside Japan's inheritance and gift tax entirely. Only Japan-situs property is taxed.
Table 2 (Beppyo Ni) statuses — permanent residency, spouse of a Japanese national, spouse of a permanent resident, long-term resident — can never qualify as temporary resident, regardless of how recently you arrived. The category is closed to you the moment you hold one of these statuses, even if you received it yesterday.
Your status alone is not enough — the giver's status counts too
This is the point almost every explanation of the temporary resident rule leaves out, and it is where the rule actually bites.
Being a temporary resident yourself only keeps foreign-situs property out of the tax base if the person giving it — the donor, or the decedent in an inheritance — is either (a) living in Japan while holding a Table 1 status of residence themselves (a "foreign donor", or for an inheritance a "foreign decedent"), or (b) a "non-resident donor" / non-resident decedent — broadly, someone living outside Japan who either had no address in Japan at any time in the preceding 10 years, or who did but held no Japanese nationality at any of those times (Inheritance Tax Act Articles 1-3(3) and 1-4(3)). The same Table 1 / Table 2 distinction that applies to you applies to the giver: a foreign parent or spouse living in Japan on permanent residency (Table 2) does not qualify as a foreign donor, even though they are a foreign national. If the gift or inheritance comes from someone who is an ordinary Japan-resident — most commonly a Japanese-national spouse, parent-in-law, or family member who has lived in Japan long-term and is not themselves temporary or non-resident — the exemption does not apply, even though you personally qualify as a temporary resident. You become an unlimited taxpayer on that transfer, and foreign-situs property is taxed in full (Inheritance Tax Act Article 1-4, paragraph 1, item 1, sub-item ro).
In practice, this catches internationally married executives hardest: a foreign national who has lived in Japan 3 years and holds a work visa is, on paper, a textbook temporary resident — until their Japanese spouse, who has lived in Japan their whole life, is the one making the transfer. The same failure occurs if the giver is a foreign parent or spouse who lives in Japan on permanent residency. In either combination, the shield does not hold.
The window closes in two different ways
Temporary resident status is not permanent. It ends the moment either of two thresholds is crossed — and both are easy to cross without realizing the tax consequence.
| Wall | What happens |
|---|---|
| 1. The status-of-residence wall | You switch from a Table 1 status (work, study) to a Table 2 status (permanent residency, spouse of a Japanese national). The switch itself ends eligibility — permanently, for as long as you hold that status. |
| 2. The 10-year wall | Your aggregate period with a Japan address within the trailing 15 years exceeds 10 years, even while you remain on the same Table 1 work visa. No status change is needed to trigger it — the clock alone does it. |
Highly Skilled Professional visa holders can apply for permanent residency in as little as 1 year, so the first wall can arrive far sooner than people expect. If a significant gift or inheritance from abroad is realistically on the horizon, the planning question is which side of both walls you want to be on when it happens.
The same ¥30 million gift, two outcomes
Same recipient, same foreign parent, same ¥30 million cash gift — the only variable is which side of the walls the recipient is standing on.
| Before the walls (temporary resident) | After the walls (permanent resident) | |
|---|---|---|
| Status | Table 1 work visa, 8 years in Japan | Permanent residency (Table 2) |
| Classification | Temporary resident — limited taxpayer | Unlimited taxpayer |
| Is the ¥30M foreign-source gift taxed? | No — foreign-situs assets excluded | Yes — full amount in the tax base |
| Gift tax due | ¥0 | ≈ ¥10,355,000 |
The right-hand calculation: ¥30,000,000 less the ¥1,100,000 annual exemption (Act on Special Measures Concerning Taxation, Article 70-2-4, which applies notwithstanding Inheritance Tax Act Article 21-5) leaves ¥28,900,000 taxed at the special rate for gifts from a lineal ascendant to a descendant aged 18 or over as of January 1 of the year of the gift — 45%, less a ¥2,650,000 bracket adjustment (Act on Special Measures Concerning Taxation, Article 70-2-5).
The same framework applies when someone dies
Inheritance tax runs on the identical structure, with matching terminology on the decedent's side: a foreign decedent (someone who, at death, held a Table 1 status and had an address in Japan — there is no 10-in-15-year test on the decedent's side) and a non-resident decedent (someone with no address in Japan at death who, in addition, either had no Japan address at any point in the 10 years before death, or did but held no Japanese nationality at any of those times) both keep an heir's own temporary-resident status effective. A Japanese-national parent who moved abroad two years ago is not a non-resident decedent — the shield fails there too. An heir inheriting from an ordinary long-term Japan-resident decedent faces the identical trap described above — foreign-situs assets pulled into the Japanese tax base despite the heir's own short time in Japan (Inheritance Tax Act Articles 1-3 and 1-4; National Tax Agency, No.4138).
How long you have been in Japan also drives two neighbouring questions: how your foreign income is taxed while you are a non-permanent resident, and what happens to your securities if you eventually leave. For a family with members on both sides of the walls — one spouse newly arrived, one a long-term resident or permanent resident — the analysis has to be run for each individual transfer, not once for the family as a whole.
The 7-year clawback — and what it does not reach
Gifts the decedent made to a person who later inherits from them are added back into that person's inheritance tax base (Inheritance Tax Act Article 19) — whoever the decedent is, not only a parent or grandparent. The 2023 reform extended the look-back from 3 years to 7, but it phases in: for a death in 2026 the reach is still the 3 years before death; for deaths from 2027 through 2030 it runs from January 1, 2024 to the date of death; and the full 7 years applies only to deaths from January 1, 2031 (NTA No.4161). Once the extended portion applies, ¥1,000,000 in total is deducted from the gifts falling outside the 3-year window.
What the add-back does not do is reopen a gift that was never taxable. Article 19 captures only property that entered your gift tax base in the year of the gift — and a foreign-situs gift you received as a temporary resident from a qualifying giver never entered that base at all. A gift that was ¥0 then stays outside the estate calculation later. That is precisely why timing the gift inside the temporary-resident window matters: it locks in the outcome permanently, not provisionally.
Separately, the sōzoku-ji seisan kazei election — the unified gift-and-inheritance taxation system (Inheritance Tax Act Articles 21-9 to 21-18; since 2024 it also carries its own annual ¥1,100,000 deduction under Article 21-11-2, which is not added back to the estate) — allows gifts to be taxed on a unified basis with a later inheritance, which can suit a staged transfer plan — but the election is irrevocable once made, and has to be weighed against the temporary-resident window specifically, not decided as a generic estate-planning default.
Founder shares and RSUs are property too
Stock, options, and vested RSUs transferred by gift or inherited follow the same domestic-situs / foreign-situs analysis as cash — the location of the underlying company, not where the certificate sits, generally governs. If equity compensation is part of what is being transferred, review it alongside our guide to RSU and equity compensation tax in Japan, since a vesting event and a gift can land in the same year and interact.
We map both sides of the transfer before it happens
Tax return preparation and advisory work in Japan is restricted to licensed tax accountants (zeirishi). At ESPERANZA, YAMAGUCHI Junya — a certified tax accountant (zeirishi), registration no. 151831 — handles the work directly, in English, from the initial classification through filing.
Our work centres on industries where expatriate executives are common — multinational manufacturers, international hotel groups, resources and infrastructure, and global BPO — supporting professionals at major foreign-owned companies through direct individual engagements, with no vendor registration required on the employer's side.
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Classify both parties. Your status-of-residence history and the giver's, mapped against the 15-year/10-year test, on both sides of the transfer.
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Time the transfer. Model the two walls against your actual visa plans, PR timeline, and years already spent in Japan.
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Calculate the exposure. What is actually in the tax base under each scenario, before a decision is made — not after.
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File, or structure a staged plan. Including the unified gift-and-inheritance taxation election (sōzoku-ji seisan kazei) where it genuinely fits, and the return itself where tax is due.
Pricing
This work is scoped individually — a diagnosis of your own and the donor's/decedent's status is the starting point, priced once we understand the transfer in question. If a standard tax return is also due independent of this analysis, that portion starts at ¥160,000 (excluding tax) under our usual return tiers.
What we need from you
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Your visa history. Passport stamps or an Immigration Services Agency disclosure covering the past 15 years.
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The donor's or decedent's residence history. Nationality, visa status if applicable, and where they have lived.
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What is being transferred, and from where. Cash, real estate, securities, or equity compensation, with the country where each asset is actually located.
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Timing. A planned gift date, or the date of death for an inheritance already underway. Deadlines are short: a gift tax return is due between February 1 and March 15 of the year after the gift (NTA No.4429), and an inheritance tax return within 10 months of learning of the death (NTA No.4205).
Common questions
I've been in Japan 3 years on a work visa. Am I automatically protected?
Only if the person giving you the gift or leaving you the inheritance is also a foreign national living in Japan or living abroad — not an ordinary long-term Japan resident. Your own status is only half of the test.
Does getting permanent residency really change everything, even for gifts already planned?
Yes — the switch from a Table 1 to a Table 2 status ends temporary-resident eligibility from that point forward. A gift received after the switch is assessed under the new status, regardless of when it was originally planned.
What if I've been on the same work visa for over 10 years?
The 10-year wall applies even without any status change. Once your aggregate period with a Japan address within the trailing 15 years exceeds 10 years, temporary-resident status ends on the same work visa you have always held.
Does this apply to real estate and stock, or just cash?
The same domestic-situs / foreign-situs framework applies to all property types — cash, real estate, securities, and equity compensation — based on where the asset is actually located, not its form.
Can I plan around this before it happens?
Yes, and that is where the value is. Once a gift has been received or an inheritance has opened, the classification is fixed by the facts as they stood at that moment. The planning window is before the transfer, not after.
▶ Need someone to actually file it? Japan tax return filing for foreign employees
Ask about your inheritance or gift tax exposure
Tell us briefly about your visa history and the transfer in question. A licensed tax accountant will reply directly, in English — confidentially.
Are colleagues at your company in the same position? We take on groups of employees under separate individual engagements — so there is no vendor registration, no procurement cycle and no credit check on your employer, however many people are involved. Just say how many in the message below.