Question:

What is the specific scope of taxable income for residents and non-residents?

Answer:

The range of income that is taxed according to the type of residence is as follows:.

1.Resident

The residents are divided into the following permanent residents and non-permanent residents.

• Permanent Resident

Permanent residents are subject to individual tax not only on income earned in Japan (domestic source income), but also on income earned outside of Japan (foreign source income). In other words, permanent residents are subject to individual tax on worldwide income.

• Non-permanent residents

Non-permanent residents are subject to individual income tax in Japan on all domestic source income and any foreign source income that is paid in or remitted to Japan.

2.Non-resident

Non-residents are subject to individual tax only on domestic source income. Residency status is determined as follows:

• Resident is defined as any individual who has lived in Japan for one year or more.
  • Permanent Resident

Permanent resident is defined as a Japanese national or a resident of non-Japanese nationality who has lived in Japan for more than 5 of the previous 10 years..

• Non-permanent Residents

Non-permanent resident is defined as a resident of non-Japanese nationality who have lived in Japan for less than 5 years of the previous 10 years.

Therefore, Non-resident is defined as an individual other than a resident or an individual who has lived in Japan for less than one year.