For employees in Japan with stock pay
RSU and stock compensation tax returns in Japan
Stock pay from an overseas parent company can be left out of your year-end adjustment. We prepare and file your Japanese tax return, by email in written English.
Individuals only. Japanese tax only. No calls.
Please note: Our tax accountant does not speak English. We work in writing only and do not offer phone or video calls. We write to you in English and handle the translation on our side.
Is this you?
- You work in Japan and receive RSUs, stock options or ESPP shares from an overseas parent company.
- You are not sure whether your stock income is on your withholding slip (gensen choshuhyo).
- You sold shares through an overseas broker.
- You have several vests, and you do not know the cost of the shares you sold.
- You are a non-permanent resident (a tax status, not a visa), and you heard that stock income kept abroad is tax-free.
How the tax works
Stock pay has two taxable moments: when you receive the shares, and when you sell them.
Example: David's RSUs
- Grant: David receives the right to 200 shares. There is no tax yet.
- Vest: The shares vest at $150, and the rate is ¥150 to the dollar. 200 × $150 × ¥150 = ¥4,500,000. This is salary income.
- Sale: He sells all 200 at $170, and the rate is ¥155. 200 × $170 × ¥155 = ¥5,270,000.
- Gain: ¥5,270,000 − ¥4,500,000 (his cost) = ¥770,000.
David is a fictional example, with no selling fees. His cost is the amount taxed as salary, not zero. With a cost of zero, he would pay about ¥914,000 more tax at the 20.315% rate.
Japan taxes gains on shares sold through an overseas broker in the same way as shares sold in Japan. You report the gain in your tax return.
When salary income arises
- RSUs: Generally when the shares vest. The exact date depends on your plan. The amount is share price × shares.
- Stock options that are not tax-qualified: When you exercise them. The amount is (share price at exercise − exercise price) × shares.
- ESPP: This depends on your plan. We confirm it from your plan terms.
Options from an overseas parent company are usually not tax-qualified.
Check your withholding slip first
Your stock income is on the slip
- Your employer included it, and the year-end adjustment (nenmatsu chosei) covered it.
- You may not need to file for that income.
- You may still need to file for other reasons, such as share sales.
Your stock income is not on the slip
- No tax was withheld in Japan.
- You generally need a final tax return (kakutei shinkoku).
- The ¥200,000 rule does not cover it.
Not sure? Compare the slip with your pay statements, or ask HR whether stock income is included.
Salary from stock is generally converted at TTM, the midpoint of the bank's buying and selling rates, on the taxable date. For sale proceeds, 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. Your broker's statement does not do this for you.
Some people hear that a non-permanent resident is taxed only on overseas income brought to Japan. That is not true for shares you received while working in Japan. Gains on those shares can be taxed even if you sell abroad and keep the money abroad. Salary for your work in Japan is also taxable wherever it is paid.
Non-permanent resident is a tax status, not a visa. It means a resident without Japanese nationality who lived in Japan for five years or less in the past ten years. It has nothing to do with the permanent resident visa.
Common mistakes
- Assuming the year-end adjustment covers everything. It covers only what your employer included.
- Relying on the ¥200,000 rule. That rule is for income other than salary. Stock pay with no Japanese withholding is outside it.
- Using a cost of zero. You would pay tax twice on the same value.
- Using the cost of one vest. When you hold the same stock from several vests, you use an average cost.
- Thinking tax withheld abroad ends the matter. It does not replace a Japanese tax return.
What you can do yourself, and where you need a professional
You can do this yourself
- Check your withholding slip, and ask HR whether stock income is included.
- List your vest dates, share numbers and share prices.
- Download your broker statements.
- With no share sales and complete records, you may be able to file yourself.
You need a professional when
- The vest and the delivery of shares fall in different years.
- You left your employer, or worked outside Japan, during the vesting period.
- Tax was withheld abroad, and you may need the foreign tax credit.
- You hold more than ¥50 million overseas on December 31, so a foreign asset report may apply.
- You did not report stock income in past years.
What we do
- Review your plan documents and statements to confirm when income arises.
- Convert each vest, exercise and sale into yen at the right rate.
- Work out your average cost and your gain on each sale.
- Check the foreign tax credit and the foreign asset report, if they apply.
- Send you a written English summary, and file after you approve it.
Your return is prepared and signed by Yuma Komatsu, Certified Public Accountant (No. 43196) and Licensed Tax Accountant (No. 151214).
We help individuals only, with Japanese tax only, and we do not offer calls. We do not prepare foreign tax returns such as US Form 1040.
Fee examples
These are the fees for our English-language service.
| Example | Fee |
|---|---|
| Salary and ¥10 million of RSU income | ¥135,000¥148,500 with tax |
| Salary, ¥10 million of RSU income, and shares sold through an overseas broker | ¥178,500¥196,350 with tax |
Your fee depends on your documents. Consumption tax is included in the second figure. Our minimum fee for any return is ¥97,500 (¥107,250 with consumption tax). We confirm your fee by email after we review your documents. These are regular fees. If you apply by December 31, 2026, you get 10% off, down to the minimum fee.
How it works
-
Get a free written quote
Tell us about your plans and your income. We aim to reply in written English within two business days, Japan time. Answers about your own tax position come after you engage us.
-
Sign the engagement letter
You review the terms and sign. We then start work on your return.
-
Upload documents
We send you a checklist and a secure upload folder. If something is missing, we ask by email.
-
Review the English summary
Before filing, you check a written English summary and approve it. If the English and Japanese differ, the Japanese original applies.
-
We file
We sign your Japanese return and file it with the National Tax Agency (NTA).
-
Receive your copies
We send you copies of the filed return, with what to pay or what refund to expect.
Frequently asked questions
My RSUs are on my withholding slip. Do I still need to file?
Perhaps not for the RSUs. You may still need to file for other reasons. Examples are a salary over ¥20 million, other income over ¥200,000, or a gain on shares sold outside an account that settles tax for you.
My RSU income was small. Can I skip the return?
Not because of the ¥200,000 rule. That rule does not cover stock pay with no Japanese withholding. A return is generally required for that pay, even if the amount is small.
I am a non-permanent resident. Is stock income tax-free if I keep it abroad?
Not as a general rule. Shares you received while working in Japan can be taxed when you sell them, even if you sell abroad and keep the money abroad. Non-permanent resident is a tax status, and it is separate from the permanent resident visa.
How is ESPP taxed?
Plans differ by company. Your employer's report to the tax office (zeimusho) can list these rights. We review your plan terms, the discount and your purchase records to decide when income arises and how to report it.
Does the tax office know about my RSUs?
It can. A Japanese company or Japan office must report stock benefits that its staff receive from a foreign parent. The report goes to the tax office (zeimusho), generally by March 31 of the following year.
I did not report stock income in past years. What can I do?
File as soon as you can. If you file a late return voluntarily, before the tax office gives notice of an audit, the late-filing penalty is 5% of the tax due. Late-payment interest may also apply. Tell us which years are affected, and we will include them in your quote.
Related guides
See your fee before you decide
Answer a few questions and get your fee in 60 seconds, or send your details for a free written quote.