Does Japan have an exit tax, and could it apply to me?
Short answer: Yes. Japan's national exit tax applies to a resident who, on leaving Japan, holds securities, unsettled margin positions or unsettled derivatives worth ¥100 million or more, provided they have had a Japanese address or residence for more than five years within the ten years before departure. The unrealised gain on those assets is treated as if sold at the time of departure and taxed, though deferral is available if a tax agent is appointed and security is provided before leaving.
Written and reviewed by Anthony Walsh, Selanis. Last reviewed 2026-10-09.
Why it works this way
The rule, introduced in the 2015 tax reform and effective for departures from 1 July 2015, is specifically aimed at residents who hold a large securities portfolio and leave Japan before realising the gain, which would otherwise let appreciation escape Japanese tax entirely.
Both tests have to be met: the ¥100 million asset threshold and more than five years of Japanese residence within the preceding ten years. A long-term American resident with a substantial portfolio of securities, unsettled margin trades or derivatives is squarely the target; someone below the threshold or who has lived in Japan only briefly is not affected.
A five-year payment deferral (extendable to ten years) is available if a tax agent is appointed in Japan and adequate security is provided before departure, with annual continuation filings; without that election, tax is generally due with the final return for the departure year.
The expensive mistake: Leaving Japan without appointing a tax agent in advance
Deferral and reduction relief generally require the tax agent appointment and security to be arranged before departure, not after. Missing this window can mean an immediate tax bill with no deferral option.
What to do
- Value your covered assets before any planned departure — Check whether you are near or above the ¥100 million threshold.
- Count your years of Japanese residence — Confirm whether the more-than-five-years test is met within the ten-year look-back.
- Decide on the tax agent and deferral election early — This has to be arranged before you leave, with annual filings to maintain it.
| Element | Position |
|---|---|
| Asset threshold | ¥100 million or more in securities, unsettled margin positions or unsettled derivatives |
| Residence test | More than 5 years of Japanese address/residence within the preceding 10 years |
| What is taxed | Unrealised gain on covered assets, deemed sold at departure |
| Deferral | Available up to 5 years (extendable to 10) with a tax agent appointed and security provided before departure |