U.S. tax services for Americans in Japan
Tailored U.S. tax filing, treaty and foreign tax credit planning, and streamlined catch-up for Japan expats, KK and GK owners, and mixed US–Japan families.
Jump to: Individual Tax Business & Trusts
- US–Japan treaty & foreign tax credit specialists
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Form 5471/ KK & GK specialists - Estate & gift treaty planning for mixed families
- Streamlined catch-up for non-filers
Individual Tax for Americans in Japan
Pick the one that sounds like you
Each card opens the forms it involves, where it usually goes wrong, and how we handle it.
Americans and green card holders living in Japan
Your Form 1040 follows you to Japan regardless of where you work. We prepare US expat returns that reflect how income actually arises here — salary and bonuses, kokumin nenkin and kosei nenkin pensions, equity compensation — and we apply the US–Japan income tax treaty and the Totalization Agreement so you are not paying US and Japanese social security twice on the same wages.
How we handle it
We build the return around the treaty, the exclusions and the foreign tax credit in the mix your facts actually favour, advise on the accrual election so inhabitant tax is credited in the right year, and use the treaty’s re-sourcing rules where the credit alone falls short.
Get started on an individual returnForms and regimes involved
Where it goes wrong
- Japanese national income tax and the income-based inhabitant tax are creditable; the per-capita levy and consumption tax are not.
- Inhabitant tax is collected roughly a year in arrears, so on a cash basis the credit can land in the wrong US tax year.
- Japanese investment trusts and insurance-linked products are typically PFICs, and the foreign tax credit does not fix that.
US owners of Japanese KK and GK companies
A Japanese kabushiki kaisha (KK) or godo kaisha (GK) held by a US person can pull Form 5471, GILTI and Subpart F onto your personal return. We handle the reporting and the planning together, including the elections that can soften the result on a company facing Japan’s comparatively high corporate rates.
How we handle it
We handle the reporting and the planning together, including the section 962 and high-tax elections that can soften the result on a company already facing Japan’s comparatively high corporate rates, and the Form 5472 and 1120 side if you are entering the US market.
Get started on KK / GK reportingForms and regimes involved
Where it goes wrong
- A KK or GK owned by a US person is typically a controlled foreign corporation, whether or not it was set up with that in mind.
- GILTI and Subpart F income lands on your personal return, not the company’s, even when no dividend is paid.
- Elections such as section 962 or the high-tax exclusion change the result — but only if they are made.
Mixed US–Japan families with estate exposure
Because the US taxes a non-resident’s US assets from just US$60,000, a Japanese spouse or parent holding US shares or property can face real US estate tax. The US–Japan estate and gift tax treaty offers a pro-rata unified credit that the default rules do not. We plan this early, while both spouses are living and options remain open.
How we handle it
We map which assets are US-situated, work through the pro-rata unified credit under the US–Japan estate and gift tax treaty, and handle the ITIN applications non-US family members need. Because it depends on planning while both spouses are living, we look at it early.
Get started on estate planningForms and regimes involved
Where it goes wrong
- A non-resident’s US-situated assets are exposed to US estate tax above just US$60,000 — US shares and US real estate both count.
- The unlimited marital deduction does not apply to a surviving spouse who is not a US citizen unless a QDOT is used.
- The treaty’s pro-rata unified credit has to be claimed, and the planning only works while both spouses are living.
Long-term non-filers
US citizenship by birth, an old green card, or a passport never renounced — many Americans in Japan discover their obligations late. Because Japanese taxes are high, catching up through the Streamlined Filing Compliance Procedures often produces little or no US tax, and we prepare the full package.
How we handle it
It is usually more fixable than people expect, and high Japanese taxes mean catching up often produces little or no US tax. Where the non-compliance was non-willful, the Streamlined Filing Compliance Procedures generally require three years of returns and six years of FBARs — we review your facts and prepare the full package.
Get started on catching upForms and regimes involved
Where it goes wrong
- The obligation usually surfaces at the worst moment — when a Japanese bank or securities firm requests FATCA paperwork.
- Years of unfiled returns often carry PFIC and foreign-account reporting inside them, not just the returns themselves.
- The Streamlined route depends on the non-compliance having been non-willful, which is a question of facts, not of preference.
Scope
What we handle
US expat returns, FBAR and FATCA, the foreign tax credit for Japanese taxes, and the US–Japan treaties. We scope every engagement in writing before work begins.
Discuss your situation- US expat returns (Form 1040) using the US–Japan income tax treaty alongside the foreign earned income and housing exclusions
- Foreign tax credit for Japanese national income tax and the income-based inhabitant (residence) tax — the per-capita levy and consumption tax are not creditable
- Managing the inhabitant-tax arrears mismatch: because it is paid a year late, we advise on the accrual election so the credit lands in the right US tax year
- Treaty pension analysis for kokumin nenkin and kosei nenkin, and Totalization Agreement coordination to avoid double social-security contributions
- Re-sourcing of income under the treaty to relieve residual US tax where the foreign tax credit alone falls short
- FBAR and Form 8938 reporting of Japanese bank, brokerage and pension accounts
- PFIC analysis and Form 8621 for Japanese investment trusts, funds and insurance-linked products
- Japanese company owners (KK and GK) held by US persons: Form 5471, GILTI and Subpart F
- US–Japan estate and gift tax treaty planning, including the pro-rata unified credit for mixed families
- Streamlined Filing Compliance Procedures for non-filers, and ITIN applications (Form W-7) for non-US family members
Business & trust services in Japan
U.S. Tax for Japanese Businesses & Foreign Trusts
In addition to personal returns, we handle Controlled Foreign Corporation reporting for Japanese KK and GK companies, foreign trust disclosures, and cross-border estate planning.
KK and GK companies and U.S. business tax
Form 5471 compliance, Subpart F / GILTI analysis, Section 962 elections, and U.S. market entry reporting (Form 5472, Form 1120/1120-F).
How we handle it
We prepare the Form 5471 reporting year by year, model the section 962 and high-tax elections before they fall due, and handle the US-side filings — Form 5472, Form 1120 and Form 1120-F — when you enter the US market.
Get started on KK / GK reportingForms and regimes involved
Where it goes wrong
- A KK or GK owned by a US person is typically a controlled foreign corporation, whether or not it was set up with that in mind.
- GILTI and Subpart F income lands on your personal return, not the company’s, even when no dividend is paid.
- Elections such as section 962 or the high-tax exclusion change the result — but only if they are made, and Japan’s comparatively high corporate rates are what make the high-tax exclusion worth modelling.
- Coming the other way, a Delaware LLC or US subsidiary carries its own reporting, including Form 5472 on related-party transactions.
Foreign trusts and cross-border estates
Japanese family trust reporting (Form 3520 / 3520-A), foreign gift and inheritance disclosures, and U.S. beneficiary planning for mixed US–Japan families.
How we handle it
We classify the trust first, then prepare the Form 3520 and 3520-A filings, the owner and beneficiary statements, and the distribution analysis — including delinquent filings with reasonable-cause statements where the reporting is already late.
Get started on trust reportingForms and regimes involved
Where it goes wrong
- Gifts or bequests from non-US persons above US$100,000 in a year are generally reportable on Form 3520. The gift itself is usually not taxable; the penalty for not reporting it can reach 25% of the amount received.
- Japanese inheritance tax falls on the heir rather than the estate, so a US beneficiary can owe tax in Japan on the same inheritance the US only asks them to report.
- Grantor or non-grantor classification decides every filing that follows, including the throwback rules on income accumulated in earlier years.
- A foreign trustee who will not file Form 3520-A does not end the obligation — a substitute statement is filed instead.
Scope
What we handle for Japanese KK and GK companies
Form 5471 reporting, GILTI and Subpart F, the elections that change the result, and the filings that follow when you expand into the US market. We scope every engagement in writing before work begins.
Discuss your situation- Form 5471 reporting for Japanese KK and GK companies owned by US persons, year by year
- GILTI and Subpart F computations, including Form 8992 and Form 8993
- Section 962 and high-tax election modelling before the return is filed
- US corporation and partnership returns for a US arm: Form 1120, Form 1120-S, Form 1065 with Schedules K-2 and K-3
- Foreign-owned US entities: Form 5472 with pro forma Form 1120, and Form 1120-F where a foreign company has US business
- Entity classification elections (Form 8832) with late-election relief, foreign partnerships (Form 8865) and transfers to a foreign corporation (Form 926)
Scope
What we handle for foreign trusts
Form 3520 and 3520-A reporting, owner and beneficiary statements, and the distribution analysis for US beneficiaries. We scope every engagement in writing before work begins.
Discuss your situation- Transactions with foreign trusts: Form 3520 for contributions, distributions, and large gifts or bequests from non-US persons
- Foreign grantor trust returns on Form 3520-A, or a substitute 3520-A where a foreign trustee will not file
- Owner and beneficiary statements for the trust’s US owners and beneficiaries
- Grantor and non-grantor classification, which determines every filing that follows
- Distributions to US beneficiaries: DNI / UNI analysis, the throwback rules and Form 4970
- Catch-up and penalty response: delinquent Form 3520 and 3520-A filings with reasonable-cause statements
FAQ
US tax in Japan: common questions
Japanese tax is high, so does the foreign tax credit wipe out my US tax?
Bottom line Usually on your salary — Japanese rates generally exceed US rates — but US-source and investment income can still leave a bill.
Usually on your salary, yes. Japan’s national income tax and income-based inhabitant tax together generally exceed US rates, so the foreign tax credit frequently reduces US tax on Japanese-source earned income to nil. It is not automatic: US-source income, some investment income and timing differences can still leave a bill. Where the credit falls short, the US–Japan treaty’s re-sourcing rules can sometimes treat income as Japanese-source and free up more credit.
Which Japanese taxes can I claim as a foreign tax credit?
Bottom line National income tax and the income-based inhabitant tax are creditable; the per-capita levy and consumption tax are not.
Japanese national income tax and the income-based portion of the local inhabitant (residence) tax are creditable against your US tax. The flat per-capita portion of the inhabitant tax is not an income tax and cannot be credited, and Japanese consumption tax is a sales-type tax that is never creditable. We separate these on the return so only the creditable amounts are claimed.
How does the inhabitant-tax arrears timing affect my US credit?
Bottom line Inhabitant tax is paid about a year late, so the accrual election is usually what lands the credit in the right US year.
Japanese inhabitant tax is assessed and collected roughly a year in arrears, so the tax you pay this year relates to last year’s income. On a cash basis that mismatch can strand the credit in the wrong US tax year. Making the accrual election for foreign taxes lets us match the inhabitant tax to the year the income arose, which usually gives a cleaner and more favourable foreign tax credit outcome.
How are my Japanese pension and US social security handled?
Bottom line The income tax treaty governs how pensions are taxed; the Totalization Agreement keeps you out of two social security systems at once.
Two agreements do the work. The US–Japan income tax treaty governs how pensions such as kokumin nenkin and kosei nenkin are taxed and which country has primary rights, while the Totalization Agreement means you generally pay into only one country’s social security system rather than both, and it lets periods of coverage in each country count toward eventual benefits. We coordinate the treaty and the Totalization Agreement so contributions and pension income are not taxed or duplicated across borders.
We are a mixed US–Japan family. How does the estate tax treaty help?
Bottom line It can replace the US$60,000 non-resident threshold with a pro-rata share of the full US unified credit — but it needs planning early.
It matters most where one spouse is a US person and the other is not, or where assets sit in both countries. A non-resident’s US estate is otherwise exposed to US estate tax above just US$60,000 of US-situated assets. The US–Japan estate and gift tax treaty can instead give the estate a pro-rata share of the full US unified credit, materially reducing that exposure. Because it needs planning while both spouses are living, we look at it early for mixed families.
Work with us
US tax obligations in Japan?
- 01 You describe the situation in a few sentences.
- 02 We respond within one business day and tell you which US filings it involves.
- 03 We scope and quote the work in writing before it begins.
Prefer email? [email protected]
Prefer to call? +852 3008 8218 (Hong Kong) +1 437 837 1029 (Toronto)