🏛️ Immigration “Permanent Residency” and "Permanent Resident" Status under the Iindividual Tax Law Are Different in Japan

In Japan, permanent residency under immigration law and tax status based on having an address in Japan under the Income Tax Act are completely different concepts.

This distinction is especially important for foreign nationals.

🏠 1. Income Tax Status in Japan

Under the Japanese Income Tax Act, your tax status is determined by whether you have an address (domicile) or place of residence in Japan, and how long you have had it.

You are treated as a permanent resident under the individual tax law if:

You have had an address (domicile) or place of residence in Japan for a total of 5 years or more within the past 10 years

👉 Your immigration status does not matter.
You may fall under this rule even if you do not hold permanent residency.

💰 Tax consequence:
You must report your worldwide income in Japan.

🛂 2. Holding a Permanent Visa Does NOT Automatically Change Your Income Tax Status

Even if you obtain permanent residency under immigration law, your income tax treatment does not change if:

You have had an address or place of residence in Japan for less than 5 years in total within the past 10 years

💸 Tax consequence:
Your income tax treatment is similar to that of a non-permanent resident taxpayer.

⚠️ 3. Why Permanent Residency Still Matters for Other Taxes

Although permanent residency does not directly affect income tax (except an Exit Tax), it does affect other Japanese taxes.

When you obtain permanent residency (i.e., a status listed in Appendix Table II of the Immigration Control Act), the following may change:

✈️ Exit Tax (tax on unrealized gains when leaving Japan)
🎁 Gift Tax
🧬 Inheritance Tax