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Japanese Exit Tax on Stocks

black and white mountain over yellow white and blue sky 46253 - Japanese Exit Tax on Stocks

I was recently asked about the Japanese EXIT Tax and how it can potentially affect people who have a presence in Japan and other countries and who also own stock in Japan.

There is no tax on capital gains on Japanese stocks for non-residents. 

Residents of Japan are taxed at a flat rate of 20.42 percent for capital gains. Gains are taxed when they have been realized (the stock has been sold). 

If you own Japanese stock while living in Japan and then sell the stock after moving abroad you may have to pay capital gains.

If you have more than 50 million yen in stock and change your tax status from a resident of Japan to a non-resident, your stock are deemed to be sold at that time.  You would then have to pay a capital gains tax on the difference between the purchase price and the market price at the time you changed your tax status to non-resident.

But if, during you stay in Japan you were a non-permanent resident (as opposed to a permanent resident) you will not have to pay the capital gains tax as in the above example.