Are my RSUs taxed twice between Japan and the US?
Short answer: Not if handled correctly, but it takes active work. Japan generally taxes RSU income at vesting as employment income, sourced by the portion of the vesting period worked in Japan, while the US taxes the same vest as a citizen regardless of location; a workday-sourcing analysis and a properly claimed US foreign tax credit are what prevent the same income from being taxed in full by both countries.
Written and reviewed by Anthony Walsh, Selanis. Last reviewed 2026-10-09.
Why it works this way
RSU grants that vest over several years while an employee works in more than one country are typically apportioned by each tax authority based on where the work underlying the vesting was actually performed, not simply where the person lives on the vesting date.
Without sourcing the grant and claiming credit for Japanese tax paid, a US citizen in Japan can end up reporting the full vest value in the US with little or no offsetting credit, effectively paying close to the combined marginal rate of both countries on the same income.
Employer withholding at vest in Japan does not automatically generate the matching documentation a US return needs; keeping vesting schedules, workday calendars and withholding statements is what makes the credit claim defensible.
The expensive mistake: Letting payroll handle it without cross-border review
Employer payroll systems generally apply one country's rules correctly but rarely coordinate the other side. The credit has to be claimed on the US return deliberately.
What to do
- Keep a workday log across the vesting period — This is the basis for sourcing the income between Japan and the US.
- Reconcile Japanese withholding with the US return — Make sure the foreign tax credit is claimed against the correctly sourced portion.
- Review grant agreements before accepting a transfer — A move mid-vesting period changes the sourcing calculation for every outstanding grant.