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Calculating Japan Inheritance Tax / 相続税

TLDR: Call the Tax Office ☎

Don't waste time online reading posts about calculation methods. I did. That's time I'm not getting back.

In any case, the tax office's official calculation guides (in Japanese) are the simplest available, but the rules are so complex that you will almost certainly mislead yourself trying to apply them.

Bite the bullet and call. I am usually against analog labour intensive solutions, but it really is best to get personalised information straight from the horse's mouth. The phone number is here.

It's not a free-dial. Even with a free-talk (かけ放題) plan you'll still pay about 33円 / minute. 

So do prepare your scenario. e.g. visa status, number of beneficiaries, size of estate, asset location, etc. It will help the officer taking your call as well as your kindly Japanese-speaking proxy who is about to be taken on a mind-bending maths-heavy theme-park ride. 

I suppose you could phone in personally if you were certified N1, but let's face it, I'm in Japan because of my looks, not my 日本語💋.

Anyway, you now know it's complex. The tax office knows it's complex. They know it's even more complex for foreigners, and so the guy taking our call was patient as he took us through our wargaming, busting some myths along the way.

Myths Busted

"I've heard that Japan's inheritance tax rate is 55%" - That's an oversimplification. Because of the complex rules, no one would be on the hook for anywhere near that.

"I've heard that in cases of inheritances from overseas the standard deduction applies to the inheritance, not to the entire estate." - True, but there are other counter-intuitive tricks in the calculation method that apply to foreigners which also make a big difference.

So what's the damage?

The closest ballpark is actually from the Ministry of Finance not the Tax Agency: a ratio of inheritance tax revenue to taxable assets of 13.1% in 2021. (Another fun fact: Inheritance Tax made up 2.4% or 2.7T円 of government revenue.)

But don't rely on that for your own calculations. As in many situations here the only way to get information is to sit through someone explaining something to you in formal Japanese. Just call and get it over with.

And welcome to Japan.



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Location: Koganei, Tokyo, Japan

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