Income Tax In Japan

A. At a Glance - Maximum Rates

Income Tax Rate (%)                        65
Capital Gains Tax Rate (%)                 65 (a)
Net Worth Tax Rate (%)                      0
Inheritance and Gift Tax Rates (%)         70 (b)

(a) Although capital gains rates vary according to the type of property, 65% is generally the maximum rate. See Section G.
(b) A 20% surtax is imposed on transfers to heirs who are not family members. See Section H.

B. Income Tax - Employment

1. Who Is Liable

For Japanese tax purposes, the tax liability of individuals is determined by residence status. Individual taxpayers are classified into the following three categories:

• A permanent resident is an individual who has a permanent domicile in Japan or who has resided continuously in Japan for more than five years.