Is there capital gains tax in Japan?

Countries like Monaco, The Cayman Islands, Singapore, Malaysia, and Hong Kong have no capital gains tax. Japan, unfortunately, does. The capital gains tax in Japan is a flat 20.315%, regardless of your income level or how much capital gains you have. This tax rate is under a separate income tax system where each type of income is taxed differently.

How is capital gains taxed?

Capital gains from sales of certain securities (including shares/equity interest in corporations, warrant bonds, etc.) are taxed separately from other sources of income at a flat rate of 20.315% (i.e. 15.315% national tax and 5% local inhabitant’s tax).

How are dividends taxed in Japan?

On the other hand, if he receives dividends from his Softbank stocks, these will be taxed at 20.315% instead of 50%. The 20.315% consists of 15.315% income tax and 5% residence tax. It is easier if you remember the tax for capital gains in Japan as approximately 20%.

How are stock options taxed in Japan?

In general, for residents, income derived from the exercise of an employee stock option issued by a non-Japanese company is treated as employment income and subject to Japanese national and local inhabitant’s tax at the graduated income tax rates.