Compliance
Staying Compliant When Leaving Japan: Exit Tax & The Assets and Liabilities Reporting Requirements
Before ending your Japan residency, understanding exit taxation and required reports can save you from unexpected liabilities and penalties.
By NomadicTax Research Team • 5-8 min read • August 24, 2026
## What Is Exit Tax (国外転出時課税制度)
Japan’s exit tax regime applies when certain residents **move abroad** (国外転出) or when assets are **gifted or inherited by non-residents**. If at that time you hold “target assets” worth **¥100 million or more** (or more than ¥1 billion in aggregate assets for some residents), you may be treated as having sold them and taxed on unrealized gains.([nta.go.jp](https://www.nta.go.jp/taxes/shiraberu/shinkoku/kokugai/01.htm?utm_source=openai))
### Key Details:
- **Target Assets** include securities, unsettled derivative positions, etc.([nta.go.jp](https://www.nta.go.jp/taxes/shiraberu/shinkoku/kokugai/01.htm?utm_source=openai))
- Taxation is triggered **on April 1, 2015 or later move**, for those meeting asset thresholds.([nta.go.jp](https://www.nta.go.jp/taxes/shiraberu/shinkoku/kokugai/01.htm?utm_source=openai))
- There’s also a special regime for **stock options** under the “特定従事者” framework, where stock option holders may face deemed disposal at exercise value upon exit. ([nta.go.jp](https://www.nta.go.jp/taxes/shiraberu/taxanswer/shotoku/1542.htm?utm_source=openai))
## Reporting Assets & Liabilities (財産債務調書制度)
For residents and those preparing to leave, there are requirements to report assets and liabilities:
- If total income (excluding retirement income) exceeds **¥20 million** and you have assets **¥300 million+**, or “exit assets” worth **¥100 million+**, you must file a **Report of Assets and Liabilities** for the year.([nta.go.jp](https://www.nta.go.jp/english/taxes/individual/pdf/incometax_2025/20.pdf?utm_source=openai))
- Also, **residents with assets above ¥1 billion** as of Dec 31 must report regardless of income.([nta.go.jp](https://www.nta.go.jp/english/taxes/individual/pdf/incometax_2025/20.pdf?utm_source=openai))
## Compliance Steps When Planning Departure
- **Appoint a tax agent (納税管理人)** residing in Japan before departure for handling filings, notifications & refunds.([nta.go.jp](https://www.nta.go.jp/english/taxes/individual/pdf/incometax_2025/21.pdf?utm_source=openai))
- Be sure to file either tax returns or quasi-final returns depending on whether you appointed the tax agent.([nta.go.jp](https://www.nta.go.jp/english/taxes/individual/pdf/incometax_2025/21.pdf?utm_source=openai))
- For stock options: determine if you're a “特定従事者” and whether your holdings will be deemed disposed.([nta.go.jp](https://www.nta.go.jp/taxes/shiraberu/taxanswer/shotoku/1542.htm?utm_source=openai))
## Example
Imagine Alex, a resident with ¥150 million in stocks and derivative positions. If he renounces residency in 2026:
- Because his “target assets” exceed thresholds, he’ll face income tax on all unrealized gains.
- Must report his positions via the assets & liabilities report by **June 30, 2026** (for Dec 31, 2025 values).([nta.go.jp](https://www.nta.go.jp/english/taxes/individual/pdf/incometax_2025/20.pdf?utm_source=openai))
- If he appointed a tax agent, he can file via tax agent during the usual period (Feb-Mar of the following year); otherwise he must file a **quasi-final return before his departure**.([nta.go.jp](https://www.nta.go.jp/english/taxes/individual/pdf/incometax_2025/21.pdf?utm_source=openai))
## Practical Tips
- Start inventorying all international/securitized assets early, valuing them accurately.
- Review employment contracts and stock option agreements—may affect whether deemed disposal applies.
- Maintain records of foreign bank holdings, property, derivatives to back up your report.
- Consult with cross-border tax specialists to factor in treaties or reliefs from foreign jurisdictions.
**Bottom Line**: Leaving Japan triggers serious tax and reporting obligations. Planning early and working with professionals is crucial to avoid penalties or unexpected tax exposure.