Japan Inheritance Tax Basics for Foreigners
Japanese inheritance tax (相続税, souzokuzei) applies when a person dies and leaves assets to heirs. This guide explains the tax system in simple terms for foreign residents in Japan.
Step 1: Calculate Total Estate Value
Add up the value of all taxable assets: real estate, bank deposits, stocks, life insurance proceeds, and other property. In Japan, real estate is valued using the official land value (路線価, rosenka), which is typically about 80% of market value.
Step 2: Apply the Basic Deduction
The basic deduction formula is:
¥30,000,000 + ¥6,000,000 × number of heirs
| Heirs | Basic Deduction |
|---|---|
| 1 heir | ¥36,000,000 |
| 2 heirs | ¥42,000,000 |
| 3 heirs | ¥48,000,000 |
| 4 heirs | ¥54,000,000 |
If the total estate is below the basic deduction, no tax is owed and no filing is required.
Step 3: Apply Tax Rates
The taxable estate is divided equally among heirs (per statutory share), then tax rates are applied to each share and totaled.
| Taxable Amount (per heir) | Rate | Deduction |
|---|---|---|
| Up to ¥10,000,000 | 10% | ¥0 |
| Up to ¥30,000,000 | 15% | ¥500,000 |
| Up to ¥50,000,000 | 20% | ¥2,000,000 |
| Up to ¥100,000,000 | 30% | ¥7,000,000 |
| Up to ¥200,000,000 | 40% | ¥17,000,000 |
| Up to ¥300,000,000 | 45% | ¥27,500,000 |
| Up to ¥600,000,000 | 50% | ¥42,000,000 |
| Over ¥600,000,000 | 55% | ¥72,000,000 |
Step 4: Filing and Payment
The inheritance tax return must be filed within 10 months from the date the heir learns of the death. The filing is made at the tax office (税務署) that has jurisdiction over the decedent's last address. Payment is due at the same time as filing.
Key Deductions and Exemptions
Spousal Deduction (配偶者控除)
The surviving spouse can inherit up to ¥160,000,000 or their statutory share (whichever is larger) tax-free.
Small Residential Land Exemption (小規模宅地等の特例)
Up to 80% reduction in land value for the decedent's primary residence (up to 330㎡).
Life Insurance Exemption
¥5,000,000 × number of heirs is exempt from inheritance tax for life insurance proceeds.
FAQ
What is the basic deduction for inheritance tax in Japan?
The basic deduction is ¥30,000,000 + ¥6,000,000 × number of statutory heirs. For example, with 2 heirs: ¥42,000,000 (approx. $280,000 USD).
When must inheritance tax be filed in Japan?
Within 10 months from the date the taxpayer learns of the decedent's death. Late filing may result in penalties.
Do foreigners pay inheritance tax in Japan?
Yes, if the decedent or heir has a domicile in Japan or meets certain residence criteria. The scope of taxable assets depends on whether you are an unlimited or limited taxpayer.
Related Guides
This guide provides general information only. It does not constitute tax advice or tax filing services. Please consult a licensed tax professional (税理士) for accurate calculations.