RSU and Stock Option Tax in Japan: When You Are Taxed and How to Check Your Withholding Slip
If your RSU or stock option income is not on your withholding slip (gensen choshuhyo), you generally must file a final tax return (kakutei shinkoku). This can apply even after your employer's year-end adjustment (nenmatsu chosei). When you sell the shares, your cost is the yen amount taxed as salary, not zero.
Do you need to file a tax return for RSUs or stock options?
You generally must file if the income is not on your withholding slip. The exception is when filing would give you a refund. For tax year 2026 (Reiwa 8), the filing period is February 16 to March 15, 2027.
An RSU (restricted stock unit) is a right to receive shares for free after a set period. A stock option is a right to buy shares at a fixed price. Japan generally taxes both as salary, even when a foreign parent company grants them.
A foreign parent may deliver shares straight to an overseas account. Japan may then withhold no tax, so the income stays out of your year-end adjustment and off your slip.
- Question 1. Is the stock income included in the payment amount (shiharai kingaku) on your slip? If you are not sure, ask your employer.
- If no: you generally need to file.
- If yes, question 2. Is your yearly salary over ¥20 million? Or is your income other than salary and retirement income over ¥200,000? Count share sale gains. Leave out sales in a Japanese specified account (tokutei koza) with withholding, if you choose not to report them.
- Yes to either: you generally need to file. No to both: you generally do not.
If you only sold shares, or your option was not taxed at exercise, start at question 2. People due a refund and people with two or more employers follow other rules. Resident tax (juminzei) may still need a separate filing.
When are you taxed, and on what amount?
RSUs are generally taxed as salary when your right to the shares becomes final, at the share price at that time. The grant itself is not taxed. You are taxed even if you keep the shares, so set aside cash for the tax.
Your plan decides the exact date. Japanese courts have used the vesting date and the date units converted into shares. One tax tribunal used the date shares reached the account, because the share count was not fixed at vesting.
| Type | When you get the shares | Gain when you sell |
|---|---|---|
| RSU | Salary: share price × shares | Sale price − share price used for salary |
| Stock option, not tax-qualified | Salary: (price on exercise date − exercise price) × shares | Sale price − price on exercise date |
| Tax-qualified stock option | No tax | Sale price − exercise price |
A tax-qualified option meets conditions in Japanese law, and tax waits until you sell. Foreign parent plans usually do not qualify. Options bought at fair value follow different rules.
Salary from stock is added to your other salary, and the total sets your tax rate.
This is a tax status, not your visa. It covers non-Japanese residents who lived in Japan for five years or less in the past ten. The status does not remove RSU tax. Pay for work done in Japan is taxable even when it is paid abroad.
How is the sale taxed?
Your gain is the sale price minus your cost and selling fees. RSU shares are free, but their cost is not zero. The cost is the yen amount taxed as salary. If you use zero, the same income is taxed twice.
Maria received 200 RSU shares in 2026 and sold them all that year. She paid no selling fee.
- Receive: 200 shares × $150 × ¥150 (mid rate) = ¥4,500,000 of salary
- Sell: 200 shares × $170 × ¥155 (buying rate) = ¥5,270,000
- Gain: ¥5,270,000 − ¥4,500,000 = ¥770,000
The difference is ¥914,175. This is only an estimate, based on the assumptions shown. It uses 2026 rates on the gain: 15.315% national tax and 5% resident tax. Tax on the salary itself is separate. It assumes the buying rate applies to the sale.
Foreign currency converts to yen at set rates:
- Salary: the mid rate (TTM, halfway between a bank's selling and buying rates) on the taxable date.
- RSU cost: the yen salary amount. You do not convert it again.
- Sale price: a National Tax Agency (NTA) circular uses the bank's buying rate (TTB) on the trade date. That circular refers to brokers registered in Japan, so confirm the rate if your broker is outside Japan.
See also why your broker statement may not match.
Common mistakes
- Leaving the income off your Japanese return because tax was withheld abroad. In one tribunal case, this belief did not cancel the penalty for underreported income.
- Using one vest price for a partial sale. Shares of the same stock received at different times use an average cost.
What you can do yourself, and where you need help
You can collect the records and check whether you must file. List each vest date, share count, share price and sale. If you sold nothing and have every figure, the NTA input example for foreign currency stock options may be enough. It is in Japanese.
These cases depend on your facts:
- Your right to the shares and their delivery fall in different years.
- Shares vest after you leave the company, or you worked outside Japan.
- Tax was withheld outside Japan.
- Your overseas assets are over ¥50 million on December 31. See our December 31 checklist.
What changes when a tax accountant handles it
A tax accountant takes the work from the filing check through to filing. What we do:
- Read your plan documents and statements, and confirm each taxable date and amount.
- Convert each vest and sale into yen, and calculate your average cost.
- Check the foreign tax credit and the Foreign Asset Report.
- Send you an English summary, and file after you approve it.
We work with individuals only, on Japanese tax only, with no calls. See our RSU tax return service, or read when you can file yourself.
With our English-language service, Maria's fee would be ¥48,000 base + ¥9,000 salary + ¥9,000 standard deductions + ¥66,000 RSUs + ¥43,500 stock sale = ¥175,500 (¥193,050 including tax). This is only an estimate, based on the assumptions shown. Our minimum fee is ¥97,500 (¥107,250 including tax).
Frequently asked questions
Does the tax office know about my RSUs?
It can. Your employer in Japan must report benefits from a foreign parent to the tax office (zeimusho), generally by March 31 of the next year. In one published tribunal case, an officer used this data before contacting the employee.
My RSU income is small. Does the ¥200,000 rule apply?
Not if the income had no Japanese withholding. That rule is for people whose whole salary is subject to withholding. Without withholding, you generally must file, even for a small amount.
How do I know if my option is tax-qualified?
Check your grant agreement and company notices. A tax-qualified option must meet every legal condition, such as a resolution under Japan's Companies Act and an annual exercise limit, generally ¥12 million. Foreign parent plans usually do not qualify.
I did not report RSUs in past years. What should I do?
Act as soon as you can. If you never filed, file a late return. The penalty is 5% of the tax if you file before any advance notice of an audit. If you left income out, file an amended return. If you overpaid, you can generally request a correction within five years of the filing deadline.
Want your RSU return handled by email?
Yuma Komatsu is a Japanese CPA and licensed tax accountant. We prepare, sign and file your return. We work by email in written English. Our tax accountant does not speak English, and we do not offer calls.
Sources
- NTA, 2025 Income Tax and Special Income Tax for Reconstruction Guide (English)
- NTA, No.12017 Conversion of foreign currency transactions into yen (English)
- NTA Tax Answer No.1900, Salary earners who must file a final return (Japanese)
- NTA Tax Answer No.2010, Who is taxed (Japanese)
- NTA, Q&A on the taxation of stock options, questions 1, 2 and 6 (Japanese)
- NTA Tax Answer No.1543, Stock options that are not tax-qualified (Japanese)
- NTA Tax Answer No.1540, Selling shares from tax-qualified stock options (Japanese)
- NTA Tax Answer No.1463, Tax on selling shares (Japanese)
- NTA Tax Answer No.1464, Cost of shares sold (Japanese)
- NTA Tax Answer No.1466, Cost of the same stock bought more than once (Japanese)
- Special Taxation Measures Circular 37-10 and 37-11 common 1 and 6, Timing of sale income and yen conversion of share prices (Japanese)
- Income Tax Basic Circular 57-3-2, Yen conversion (Japanese)
- NTA filing site, Input example for foreign currency stock options (Japanese)
- NTA, Report on benefits given by a foreign parent to officers and employees in Japan (Japanese)
- NTA, Report of Foreign Assets FAQ, August 2026, questions 1, 2, 11, 12, 18 to 24, 29 to 31, 36, 39, 40, 51 and 52 (Japanese)
- NTA Tax Answer No.2024, If you did not file on time (Japanese)
- NTA Tax Answer No.2026, If your return was wrong (Japanese)
- National Tax Tribunal, decision of July 24, 2012 (Japanese)
- National Tax Tribunal, decision of December 7, 2023 (Japanese)
- Osaka District Court, judgment of February 15, 2008 (Japanese)
- Tokyo District Court, judgment of September 30, 2015 (Japanese)
- Nagoya District Court, judgment of May 29, 2014 (Japanese)
- Income Tax Act, Articles 7, 36, 48, 57-3, 120, 121 and 228-3-2 (Japanese)
- Order for Enforcement of the Income Tax Act, Articles 84, 109 and 118 (Japanese)
- Act on Special Measures Concerning Taxation, Article 29-2 (Japanese)
- Local Tax Act, Article 317-2 (Japanese)
This article is general information based on rules in force as of November 6, 2026. It is not advice for your situation.