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Crypto and Side Income Tax in Japan: The 200,000-Yen Rule
Crypto and side income tax in Japan follows one pattern for most salaried residents: crypto gains and side earnings are usually miscellaneous income (雑所得, zatsu shotoku), added to your salary and taxed at progressive rates.12 The 200,000-yen rule can remove the duty to file a national income tax return, but it does not remove the duty to declare that income for residence tax.34
Procedures, fees, and requirements can change. Confirm current details at the National Tax Agency (国税庁) website. This article is general information, not tax advice; for your specific case, such as high-volume or DeFi crypto activity, sizeable foreign-platform income, non-permanent-resident status, or prior years that went unfiled, consult a licensed tax accountant (zeirishi, 税理士).
Overview
Side income means anything you earn outside your main salary: crypto gains, freelance gigs, platform payouts, a second job, or regular resale activity. The National Tax Agency (NTA), Japan's national tax authority, gives examples of side income treated as miscellaneous income, including flea-market and auction sales (other than sales of personal-use belongings), lending a private car, babysitting or tutoring, selling crypto assets such as bitcoin, private lodging (民泊, minpaku) income, and minting an NFT and transferring it to someone else.5
Manuscript fees and sharing-economy income are the NTA's examples of business-related miscellaneous income (業務に係る雑所得, gyōmu ni kakaru zatsu shotoku).2 Side income is not a tax category in itself; 副業 (fukugyō, "side job") is an everyday word, and the tax treatment depends on which legal income category the earnings fall into.
Your tax-resident status decides how much of your income Japan taxes. A resident (居住者, kyojūsha) is someone with a domicile in Japan, or who has lived in Japan continuously for one year or more; residents other than non-permanent residents are taxed on all income arising in Japan and abroad.6
A non-permanent resident (非永住者, hi-eijūsha) is a resident without Japanese nationality whose total domicile or residence in Japan over the past 10 years is 5 years or less.6 The article Tax Resident Classification in Japan covers the categories in detail.
Income tax runs on the calendar year. The return for a given year is filed, in principle, from February 16 to March 15 of the following year.7
| Term | Reading | Meaning |
|---|---|---|
| 副業 | fukugyō | Side job or side business (everyday term, not a tax category) |
| 雑所得 | zatsu shotoku | Miscellaneous income, the residual income category2 |
| 確定申告 | kakutei shinkoku | Final income tax return7 |
| 年末調整 | nenmatsu chōsei | Year-end adjustment done by your employer3 |
| 居住者 / 非永住者 / 非居住者 | kyojūsha / hi-eijūsha / hi-kyojūsha | Resident / non-permanent resident / non-resident for tax purposes6 |
How side income is classified
The income category your side earnings fall into decides two things: whether a loss can reduce the tax on your salary, and which special deductions are available. Most salaried people's side income lands in miscellaneous income, but a larger, organized activity can be business income instead.
Miscellaneous income versus business income
Miscellaneous income has three sub-types: public pensions, business-related miscellaneous income, and "other" miscellaneous income.2 Business-related and other miscellaneous income are both computed as total revenue minus necessary expenses.2
A loss in miscellaneous income cannot be offset against other income such as salary.2 Only losses from real-estate, business, timber, and capital-gains income can be offset that way.1
The 2022 basic-circular revision
The NTA partially revised its basic income tax circular (所得税基本通達, shotokuzei kihon tsūtatsu), the administrative guidance its offices follow, on October 7, 2022.8 Circular 35-2 lists examples of business-related miscellaneous income, such as manuscript, illustration, and design fees, lecture fees, lending money or movable property, and transferring assets continuously for profit.9
Whether an activity produces business income turns on whether it is carried on at a level socially recognized as a business (社会通念上事業と称するに至る程度).9 The NTA's commentary frames this as a question of scale: business-scale activity gives business income, smaller-scale activity gives business-related miscellaneous income.9
Bookkeeping is the practical marker. Under the circular, if you do not keep books and records of the transactions, the income is treated as business-related miscellaneous income, except where revenue exceeds 3,000,000 yen and there are facts showing it is business income.9
How crypto is classified
The NTA's crypto FAQ treats crypto gains, in principle, as "other" miscellaneous income (as of December 2025; confirm current figures with the National Tax Agency).1 The circular commentary also names crypto assets among the assets whose transfer gives "other" miscellaneous income rather than capital-gains income.9
Where a year's crypto revenue exceeds 3,000,000 yen, the FAQ treats it in principle as business income if books and records are kept, and as business-related miscellaneous income if they are not (as of December 2025).1 Even with books, if the trading lacks a profit-seeking character (営利性), the business-income question is judged case by case (as of December 2025).1
Crypto used incidentally within an existing business, such as a business that holds crypto and uses it to pay for inventory, produces business income.1
Why the category matters
| Feature | Miscellaneous income | Business income |
|---|---|---|
| Loss offsets salary and other income | No12 | Yes1 |
| Blue-return filing (青色申告, aoiro shinkoku) available | No10 | Yes10 |
| Blue-return special deduction | Not available | Up to 550,000 yen, or 650,000 yen with e-filing or electronic bookkeeping10 |
| 3-year net-loss carryforward | Not available | Available with a blue return10 |
The blue-return deduction amounts in the table are current law (as of April 2026).10 The FY2026 tax amendment outline raises them for future years, to 650,000 yen (adding an e-filing requirement) and 750,000 yen (with electronic-records requirements) (as of February 2026); the year these increases apply was not confirmed, so check the NTA before relying on them.11
To use blue-return filing, you apply by March 15 of the year you want it to start, or within two months of starting the business.10 The business-income route is covered in Sole Proprietor Income Tax: Computing the Number.
A second job paid as salary
Part-time pay from a second employer is salary income (給与所得, kyūyo shotoku), not miscellaneous income.3 It falls under the NTA's rules for people paid salary by two or more employers.
If all of your salary is subject to withholding, you must file when the salary not covered by year-end adjustment, plus the total of your other income (excluding salary and retirement income), exceeds 200,000 yen, subject to an exception for lower total salaries set out in Tax Answer No. 1900.3 Your main employer's year-end adjustment covers only the salary it pays.
Income after expenses: what you can deduct
Income (所得, shotoku) is not the same as revenue. For business-related and other miscellaneous income, income equals total revenue minus necessary expenses.2
The 200,000-yen test applies to that net income figure, not to gross receipts.32 A side activity can bring in more than 200,000 yen and still stay under the line once its expenses are subtracted.
For crypto, the NTA lists these as necessary expenses:1
- the cost of the crypto sold (譲渡原価, jōto genka) and fees paid on the sale;
- internet, smartphone line, and computer costs, only for the portion directly necessary for crypto transactions, and only where that portion can be clearly separated from personal use;
- costs incurred for mining, staking, and lending.
A computer or other asset with a useful life of one year or more, above a certain amount, is depreciated (減価償却, genka shōkyaku) over its useful life rather than deducted in full in one year.1 If your crypto income is business income or business-related miscellaneous income, the general and administrative costs of running the activity are also deductible.1
Recordkeeping standard
For business-related miscellaneous income, record rules scale with revenue. From the 2022 income year, if your revenue from that activity two years earlier exceeded 3,000,000 yen, you must keep cash and deposit transaction documents (現金預金取引等関係書類, genkin yokin torihiki-tō kankei shorui) (as of April 2026).2 Those documents are kept for 5 years.12
If revenue two years earlier exceeded 10,000,000 yen, you must also attach an income and expense statement (収支内訳書, shūshi uchiwakesho) to the return (as of April 2026).2
Ordinary crypto trading is "other" miscellaneous income, not business-related, so these thresholds attach to business-related side activities, not automatically to crypto trading.12
The 200,000-yen filing rule
The 200,000-yen rule, often called the 20万円ルール (nijūman-en rūru), answers one question: does your side income force you to file a national income tax return (kakutei shinkoku)? It answers only that question, and only for people who meet its conditions.
Who the rule covers
The rule covers a salaried person paid by one employer, with all salary subject to withholding. That person must file if the total of income other than salary and retirement income exceeds 200,000 yen; at 200,000 yen or less, the person is not required to file for that reason.3
Anyone whose annual salary exceeds 20,000,000 yen must file regardless of side income.3 NTA Tax Answer No. 1906 applies the same rule to side income from online auctions and similar sources.5
The rule does not shelter every salaried person. Company officers of family companies who receive interest or rent from the company, and people paid salary by a payer not obliged to withhold tax, must also file.3
The decision path for a salaried person with one employer runs as follows, based on the NTA's filing rules and municipal residence-tax guidance from Minato City and Yokohama City.3413
What the rule does not cover
The rule is a national income tax filing exemption only. Four situations sit outside it.
Residence tax. Residence tax is calculated from the previous year's total income, so a small side income still changes the amount. The declaration procedure is set by each municipality, covered below.413
Any return you do file. The rule defines when filing is unnecessary; it is not permission to leave small side income off a return you file anyway. The NTA's Q&A on Tax Answer No. 1900 states that a return filed for another reason, such as claiming a medical-expense deduction, must include side income even if it is 200,000 yen or less.14
People without year-end adjustment. Freelancers, people paid by payers who do not withhold, and people with salary over 20,000,000 yen are outside the rule.3 The article Year-End Adjustment vs. Kakutei Shinkoku: Which You File explains which route applies.
Pension recipients. A separate rule applies: no filing is needed if public pension revenue is 4,000,000 yen or less and income other than the pension's miscellaneous income is 200,000 yen or less.15
The residence tax declaration
Residence tax (住民税, jūminzei) is levied by the municipality where you are domiciled on January 1, based on the previous year's income.16 In Tokyo, the income-based portion is 10%: 4% metropolitan tax plus 6% ward or municipal tax.16
Tokyo also charges a per-capita portion of 1,000 yen metropolitan and 3,000 yen municipal, plus a 1,000-yen forest environment tax (as of October 2026; confirm current figures with the Tokyo Metropolitan Government Bureau of Taxation).16 The article How Residence Tax Is Calculated covers the calculation in full.
| Term | Reading | Meaning |
|---|---|---|
| 住民税申告 | jūminzei shinkoku | Residence tax declaration filed with your municipality13 |
| 特別区民税・都民税 | tokubetsu kuminzei / tominzei | Special-ward tax and Tokyo metropolitan tax, the two parts of residence tax in Tokyo's 23 wards4 |
| 所得割 / 均等割 | shotokuwari / kintōwari | Income-based portion / per-capita portion of residence tax16 |
| eLTAX | erutakkusu | The local-tax electronic filing portal17 |
The residence tax declaration (住民税申告) is the municipal filing owed when you have side income but do not file a national return. Filing a national return generally takes care of it; Yokohama City, for example, states that a separate declaration is needed only when no national return is filed.13
The procedure is municipal, so the form, the counter, and the online options vary. Check with your own ward or city office. Two examples:
- Minato City (Tokyo): the declaration deadline for fiscal 2026 was March 16, 2026, the same day as the national deadline that year (as of February 2026).18 Minato accepts declarations at the counter, by post, and electronically (as of February 2026), including online through eLTAX's residence-tax declaration service with a smartphone or PC and a My Number Card (as of January 2026).1817
- Yokohama City: declarations go to the tax section (税務課, zeimuka) of your ward office.13
How crypto is taxed
This section covers crypto held by a Japanese tax resident under the rules in force today. The pending 20% reform is covered at the end of the section and does not yet apply.
Progressive rates up to about 55 percent
Because crypto gains are, in principle, "other" miscellaneous income and crypto is not treated as a capital-gains asset, the gains are added to your salary and other income under comprehensive taxation (総合課税, sōgō kazei) and taxed at progressive rates.19 There is no flat rate for crypto under current law.
On top of national income tax, a surtax of 2.1% of the national tax applies.19 From January 2027, that surtax is restructured into a 1.1% reconstruction surtax and a new 1% defense surtax, so the combined rate stays at 2.1%.20
The table below combines the NTA rate table current to April 2026 with the 2.1% surtax and Tokyo's standard 10% residence tax.192016 Residence tax is computed on a slightly different income base from national tax, so the combined column is an approximation of the marginal rate on additional income.
| Taxable income (yen) | National rate | National deduction (yen) | National incl. 2.1% surtax | Residence tax (Tokyo standard) | Combined marginal (approx.) |
|---|---|---|---|---|---|
| 1,000 – 1,949,000 | 5% | 0 | 5.105% | 10% | 15.1% |
| 1,950,000 – 3,299,000 | 10% | 97,500 | 10.21% | 10% | 20.2% |
| 3,300,000 – 6,949,000 | 20% | 427,500 | 20.42% | 10% | 30.4% |
| 6,950,000 – 8,999,000 | 23% | 636,000 | 23.483% | 10% | 33.5% |
| 9,000,000 – 17,999,000 | 33% | 1,536,000 | 33.693% | 10% | 43.7% |
| 18,000,000 – 39,999,000 | 40% | 2,796,000 | 40.84% | 10% | 50.8% |
| 40,000,000 and over | 45% | 4,796,000 | 45.945% | 10% | 55.9% |
Listed shares, by contrast, are taxed separately at 15% national income tax plus 5% residence tax; with the surtax on the national portion, the total is 20.315%.21 The article Japan Income Tax Brackets and the Reconstruction Surtax covers the bracket mechanics.
What counts as a taxable event
Tax arises when you sell, spend, or swap crypto, not while you hold it. Each event is valued in yen at the time it happens.1
| Event | Tax treatment | Source |
|---|---|---|
| Selling crypto for yen | Income = sale price minus cost of the crypto sold | 1 |
| Paying for goods or services with crypto | Treated as a transfer of the crypto; income = its value at payment minus cost | 1 |
| Swapping one crypto for another | Treated as a transfer of the crypto given up; computed the same way as paying for goods | 1 |
| Mining, staking, lending rewards | Market value at the time of receipt is revenue; related costs are expenses | 1 |
| New crypto from a fork (分岐) | No income on receipt; income arises when sold or used, with a cost of 0 yen | 1 |
| NFT or fungible token received for services | Business, salary, or miscellaneous income | 22 |
| NFT or fungible token acquired incidentally or by chance | Occasional income (一時所得, ichiji shotoku) | 22 |
| Minting an NFT and transferring it | Miscellaneous income | 5 |
| Holding crypto with unrealized gains | No NTA FAQ item taxes mere holding | 1 |
Reselling an NFT or fungible token that is a capital-gains asset gives capital-gains income, but continuous for-profit trading gives miscellaneous or business income.22 These token rules apply where the token can be exchanged for assets with economic value, such as crypto.22
Airdrops have no dedicated item in the NTA crypto FAQ. The closest NTA guidance covers tokens acquired incidentally or by chance and new crypto from forks, so treatment depends on the facts of the specific airdrop.221
On timing, income belongs in principle to the year the sold crypto is delivered; by election, it can be the year the sale contract was made.1
Swapping one token for another, or paying for something with crypto, is a taxable transfer valued in yen at that moment.1 You can owe tax on the gain even though no yen ever reached your account, so the cash to pay it has to come from elsewhere.
Calculating cost basis: total-average or moving-average
The cost of crypto sold is calculated separately for each type of crypto: the value carried over on January 1, plus the total cost of crypto acquired during the year, minus the value held on December 31.1 The year-end value uses one of two methods.1
- Total-average method (総平均法, sōheikin-hō): divide the opening value plus the year's total acquisition cost by the total units to get one unit cost for the year.1
- Moving-average method (移動平均法, idōheikin-hō): recompute the average unit cost at each acquisition; the average closest to December 31 becomes the year-end unit cost.1
If you do not choose a method, individuals use the total-average method (as of December 2025; confirm current figures with the National Tax Agency).1 To choose, you file a notification of crypto valuation method (所得税の暗号資産の評価方法の届出書) with the tax office for your tax domicile by the filing deadline, in principle March 15, for the year you first acquire crypto or a new type of crypto; the choice is made per type (as of December 2025).1
Changing method later requires an approval application filed by March 15 of the year of change; it is deemed approved if no decision arrives by December 31 (as of December 2025).1 An application can be rejected if a reasonable period, three years absent special reasons, has not passed since you adopted the current method (as of December 2025).1
The method changes the result. In an NTA worked example, the same trades give a cost of crypto sold of 3,106,000 yen under the total-average method and 3,080,200 yen under the moving-average method.1
The NTA publishes a crypto calculation worksheet (暗号資産の計算書) in versions for both methods, designed to be filled in from the annual transaction reports that Japanese exchanges send their customers.1
| Term | Reading | Meaning |
|---|---|---|
| 譲渡原価 | jōto genka | Cost of crypto sold1 |
| 年間取引報告書 | nenkan torihiki hōkokusho | Annual transaction report issued by Japanese exchanges1 |
| 暗号資産交換業者 | angō shisan kōkan gyōsha | Registered crypto-asset exchange service provider1 |
Losses do not travel
A crypto loss computed as miscellaneous income cannot be offset against salary or other income.1
There is also no carryforward route for these losses under current rules. The NTA does not say so in a single sentence, but the 3-year net-loss carryforward is a blue-return benefit, and blue returns are available only for real-estate, business, and timber income, which leaves miscellaneous-income crypto losses without a carryforward.101
From the reform start date only, losses on specified crypto assets transferred to a registered crypto-asset trading operator can, under conditions, be carried forward 3 years against later gains on specified crypto assets (as of October 2026).112324 Losses from earlier income years do not benefit.
The 20 percent separate-taxation reform
Japan has legislated a move of specified crypto assets to 20% separate taxation (申告分離課税, shinkoku bunri kazei), the same structure used for listed shares.2411 The tax change is tied to bringing crypto under the Financial Instruments and Exchange Act (金融商品取引法, Kin'yū Shōhin Torihiki Hō, FIEA). The legislative steps so far are set out below (as of October 2026).
| Step | Date | Source |
|---|---|---|
| FY2026 tax reform outline (大綱) approved by cabinet | 2025-12-26 | 24 |
| Income Tax Act amendment bill submitted to the Diet | 2026-02-20 | 23 |
| Income Tax Act amendment enacted and promulgated (Law No. 12 of 2026) | 2026-03-31 | 23 |
| FIEA and Payment Services Act amendment bill submitted | 2026-04-10 | 2728 |
| FIEA amendment passed the House of Representatives | 2026-06-11 | 28 |
| FIEA amendment passed the House of Councillors (enacted) | 2026-07-15 | 2728 |
| FIEA amendment promulgated (Law No. 64 of 2026) | 2026-07-23 | 28 |
| FIEA penalty and investigation provisions in force | 2026-08-12 | 26 |
| FIEA main provisions, including crypto, in force | A date set by cabinet order, in principle within one year of promulgation; not yet fixed | 25 |
| Tax reform start | January 1 of the year after the FIEA amendment takes effect | 24 |
When the 20 percent rate starts
The separate-taxation rules apply to transfers on or after the application start date (適用開始日, tekiyō kaishi-bi), defined as January 1 of the year after the amended FIEA takes effect (as of October 2026).24 The amended FIEA takes effect on a date set by cabinet order, in principle within one year of its July 23, 2026 promulgation.2528
The FSA's July 29, 2026 ordinance notice covered only the provisions that took effect 20 days after promulgation, such as penalties for unregistered business, and did not set the date for the crypto provisions (as of July 2026).26 The tax start is therefore January 1, 2027 or January 1, 2028, depending on when the cabinet order sets the FIEA effective date (as of October 2026).242528
The start-date logic follows directly from the reform outline's definition.2425
What qualifies and at what rate
In tax law, specified crypto assets (特定暗号資産, tokutei angō shisan) are crypto whose name is entered on the register of financial instruments business operators, transferred by a resident to a crypto-asset trading operator (暗号資産取引業者, angō shisan torihiki gyōsha) (as of March 2026).1124 Only transfers of registered-name crypto to a registered crypto-asset trading operator qualify. The FIEA amendment uses the same Japanese term for a different, disclosure-related concept, so the tax definition is the one that matters here.25
The 20% rate splits into 15% national income tax and 5% residence tax (as of March 2026).112324 The 15% national rate is in the enacted law; the 5% residence-tax portion is taken from the cabinet-approved reform outline.2423 The crypto provisions reviewed do not state how the 2.1% surtax applies, though the surtax is generally levied on national income tax, as it is for listed shares at a combined 20.315%.1921
Under the reform, operators also take on new duties and the regime extends beyond spot trading:
- Losses on specified crypto assets left after offsetting that year's specified-crypto gains can, under conditions, be carried forward 3 years against specified-crypto gains (as of March 2026).1124
- The futures-trading separate-taxation rule extends to derivative transactions on specified crypto assets, and investment trusts investing in specified crypto are covered (as of December 2025).24
- Crypto-asset trading operators must report residents' specified-crypto transactions, including name and My Number, to the tax office by January 31 of the following year (as of March 2026).1124
Crypto that does not qualify
For crypto outside the 20% regime, the outline and bill set three restrictions from the start date: no capital-gains special deduction, no half-inclusion for assets held over 5 years, and no offset of losses against other comprehensively taxed income (as of March 2026).2411 Whether particular overseas-exchange or DeFi transactions fall wholly into this category is not settled in the primary sources reviewed.
For income years before the start date, the progressive comprehensive rules described earlier in this section apply to all crypto.241
| Term | Reading | Meaning |
|---|---|---|
| 申告分離課税 | shinkoku bunri kazei | Separate taxation by self-assessment21 |
| 総合課税 | sōgō kazei | Comprehensive taxation, where income is combined and taxed at progressive rates24 |
| 特定暗号資産 | tokutei angō shisan | In tax law, specified crypto assets eligible for the 20% regime24 |
| 暗号資産取引業 | angō shisan torihiki gyō | Crypto-asset trading business, the provisional post-amendment term for exchange operators24 |
| 金融商品取引法 | Kin'yū Shōhin Torihiki Hō | Financial Instruments and Exchange Act (FIEA)25 |
Foreign exchanges and foreign platforms
Using an overseas exchange or earning through an overseas platform does not move income outside Japanese tax. What changes is who supplies the records, and for non-permanent residents, possibly the taxable scope.
Overseas crypto exchanges and information reporting
Residents other than non-permanent residents are taxed on worldwide income, so gains on overseas exchanges are taxable in the same way as gains on Japanese ones.6 The NTA describes annual transaction reports only as documents sent by Japanese exchange operators.1 If you trade on an overseas exchange, you may not receive a Japanese-format annual report and need to build your own records for the cost calculation.
For asset reporting (not income), crypto held on an overseas exchange by a Japanese resident is not treated as property located abroad for the foreign assets report (国外財産調書, kokugai zaisan chōsho), because its location is judged by the owner's address. Where a report applies, it goes on the statement of assets and liabilities (財産債務調書, zaisan saimu chōsho) instead.1
The Crypto-Asset Reporting Framework
The Crypto-Asset Reporting Framework (CARF) is an OECD standard for exchanging information on crypto transactions between tax authorities. It was approved by the OECD Committee on Fiscal Affairs in 2022; in November 2023, Japan and 47 other jurisdictions issued a joint statement on implementing it, and by November 2024 more than 60 jurisdictions had said they would begin exchanges by 2027 or 2028.29
Japan legislated its reporting system in the FY2024 tax reform: Japanese reporting operators identify covered transactions from 2026, report them in 2027, and automatic exchange with other tax authorities under tax treaties follows (as of March 2026; confirm current figures with the National Tax Agency).29 Customers transacting with Japanese reporting operators from January 1, 2026, and those with ongoing transactions as of December 31, 2025, submit a self-certification of their country of residence (as of January 2026).30
Japanese operators report covered non-residents' data, such as name, address, residence country, foreign tax number, and per-asset totals, to the tax office by April 30 of the following year (as of January 2026).30 Under CARF, each tax authority collects reports about non-residents from providers in its own jurisdiction and passes them to the residence country.29 Information about a Japan resident's activity on a foreign platform would therefore come from that foreign jurisdiction's reporting.
Separately from CARF, the 20% reform adds domestic reporting: crypto-asset trading operators will report residents' specified-crypto transactions, with My Number, by January 31 of the following year (as of March 2026).11 The articles CRS Reporting in Japan for Non-US Foreign Tax Residents and My Number and Banking: Requirements and Rules cover the parallel regime for bank and financial accounts.
Income from foreign platforms
Residents other than non-permanent residents are taxed on income arising both in and outside Japan, so payouts from overseas platforms or clients are taxable regardless of where the payer is.6 Video ad revenue, app-store sales, freelance marketplace earnings, and payments from overseas clients all fall under this rule. The article Worldwide Income vs. Japan-Source Income covers the distinction in detail.
Foreign-currency income has to be converted to yen. Basic circular 57の3-2 sets the rate in principle as the TTM (the midpoint of a bank's telegraphic transfer selling and buying rates) on the transaction date. The circular is also commonly summarized as letting real-estate, business, timber, and miscellaneous income use the TTB (buying rate) for revenue and the TTS (selling rate) for expenses if applied consistently; the NTA page did not render at edit time, so confirm that option with the NTA or a tax accountant.31
If foreign income tax was withheld from a payout, a resident can credit it against Japanese income tax through the foreign tax credit (外国税額控除, gaikoku zeigaku kōjo). The credit is capped at Japanese income tax multiplied by the share of adjusted foreign-source income in total income, unused excess or limit carries over 3 years, and you claim it by attaching the foreign tax credit statement and supporting documents to your return.32
Whether tax withheld by a particular payer country can be credited or reduced depends on that country's tax treaty with Japan. The credit mechanism is national, but the treaty terms are not uniform, so check the treaty for the payer's country.32
Non-permanent residents and the remittance rule
Non-permanent residents are taxed on income other than foreign-source income, plus foreign-source income that is paid in Japan or remitted to Japan from abroad.6 They are a subset of residents; Tax Answer No. 2010 defines their position by taxable scope and does not set a separate rate for them.6
How this applies to crypto is not settled. The NTA's crypto FAQ has no item on non-permanent residents, and the NTA guidance reviewed does not address whether crypto gains are Japan-source or foreign-source income for them.1 A non-permanent resident with offshore crypto or foreign-platform income should take that question to a zeirishi.
The article Foreign-Source Income Rules for Non-Permanent Residents covers the remittance rule itself.
Filing and paying
Once your side income requires a national return, the mechanics are the same as for any other individual filer. The residence-tax collection choice on the return is the one step specific to side income.
Deadline, forms, and e-Tax
The return is filed, in principle, from February 16 to March 15 of the year after the income year.7 When March 15 falls on a weekend, the deadline moves: returns for 2025 income were due March 16, 2026, because March 15 was a Sunday (as of March 2026; confirm current figures with the National Tax Agency).33
For 2026 income, the statutory rule gives a deadline of March 15, 2027 (as of October 2026); confirm it when the NTA publishes its filing-season page.7 If you want to use the moving-average method for crypto acquired in 2026, the valuation-method notification is due by the same filing deadline (as of December 2025).1
| Period | What happens | Source |
|---|---|---|
| January 1 to December 31 | Income year; side income and crypto gains accrue | 7 |
| January 1 of the following year | Residence tax is assessed by the municipality where you are domiciled on this date | 16 |
| February 16 to March 15 of the following year | National filing period; crypto valuation-method notification due by the deadline | 71 |
| From June of the following year | Residence tax on salaried people's income is withheld from pay, June to May (Tokyo) | 16 |
Choosing the return form, entering miscellaneous income, and filing online through e-Tax with a My Number Card are covered step by step in The Tax Office (Zeimusho) and the e-Tax Portal. The year's full set of dates is in The Japanese Tax Year and Filing Calendar.
Paying residence tax on side income yourself
The second page of the national return (第二表, dai-nihyō) has a section on residence tax (住民税に関する事項). There, you choose how residence tax on income other than salary and public pensions is collected: deducted from salary (給与から差引き) or paid yourself (自分で納付).34
Deduction from salary means special collection (特別徴収, tokubetsu chōshū): your employer withholds residence tax from monthly pay from June to May.16 Paying yourself means ordinary collection (普通徴収, futsū chōshū), paid by payment slip or bank debit; in Tokyo, ordinary collection is paid in four installments.1634
The election covers only residence tax on non-salary, non-pension income. It does not move residence tax on salary, including salary from a second job, off special collection.34 The article Special vs Ordinary Collection of Residence Tax covers both systems.
Records to keep
For crypto, keep the annual transaction reports from Japanese exchanges and everything needed for the per-type cost calculation: opening holdings, each acquisition, and year-end holdings.1 For overseas exchanges, that means your own exported transaction histories and the wallet addresses involved, since the calculation needs every acquisition.1
Exporting a complete history while an overseas account is still open keeps those records in your hands if the account or exchange later closes. The NTA crypto FAQ also has an item on cases where an acquisition or sale price is unknown.1
For business-related side activities whose revenue two years earlier exceeded 3,000,000 yen, cash and deposit transaction documents are kept for 5 years (as of April 2026).212 Platform payout statements and expense receipts support the revenue and expense figures on any return.
Penalties and visa consequences
Unreported side income has two kinds of cost: tax penalties assessed by the NTA, and a negative mark when immigration authorities review your tax record at renewal or permanent-residency application.
Late-filing and underpayment penalties
| Term | Reading | Meaning |
|---|---|---|
| 無申告加算税 | mushinkoku kasanzei | No-filing surcharge35 |
| 過少申告加算税 | kashō shinkoku kasanzei | Understatement surcharge36 |
| 延滞税 | entaizei | Late-payment interest37 |
The no-filing surcharge rates below are statutory and apply to returns whose statutory deadline is on or after January 1, 2024, which covers 2023 income onward.35
| Situation | No-filing surcharge rate | Source |
|---|---|---|
| Voluntary late filing before notice of a tax examination | 5% | 35 |
| Late filing after notice, before the examination | 10% up to 500,000 yen; 15% over 500,000 to 3,000,000 yen; 25% over 3,000,000 yen | 35 |
| Late filing after the examination | 15% up to 500,000 yen; 20% over 500,000 to 3,000,000 yen; 30% over 3,000,000 yen | 35 |
No no-filing surcharge applies if you file voluntarily within one month of the statutory deadline, pay in full by the payment deadline, have had no no-filing or heavy surcharge in the previous 5 years, and are recognized as having intended to file on time.35 Late-payment interest still runs until the date you pay.35
If you filed but understated your income, the understatement surcharge applies instead. A voluntary amended return filed before notice of an examination carries no understatement surcharge, while an amendment after an examination carries 10%, rising to 15% on the part exceeding the greater of the original tax or 500,000 yen.36 An amendment after notice but before the examination carries 5%, rising to 10% on the same excess portion.36
Late-payment interest runs from the due date until you pay, and late filing triggers it too.35 The rates below are for 2026 (as of April 2026; confirm current figures with the National Tax Agency).37
| Period after due date | Rate | As of | Statutory formula |
|---|---|---|---|
| Up to 2 months | 2.8% per year | 202637 | Lower of 7.3% or the special base rate plus 1% |
| After 2 months | 9.1% per year | 202637 | Lower of 14.6% or the special base rate plus 7.3% |
For comparison, the rates for 2022 to 2025 were 2.4% and 8.7% per year (as of April 2026).37
Tax records and your status of residence
Immigration reviews your tax record. The Immigration Services Agency's permanent-residency guideline requires applicants to properly fulfil public obligations, including tax payment, and states that payment not made within the original payment period is in principle evaluated negatively even if it is paid by the time of application (as of February 2026).38
The guideline for renewing or changing a status of residence lists fulfilment of tax obligations as a factor, and non-fulfilment counts against the application (as of June 2026).39 For the Engineer/Specialist in Humanities/International Services status, the renewal checklist asks Category 3 and 4 applicants for a residence-tax assessment certificate (課税証明書, kazei shōmeisho) and tax payment certificate (納税証明書, nōzei shōmeisho) showing a year's total income and payment status (as of October 2026).40
Under the permanent-residency guideline, tax paid late is in principle evaluated negatively even if the arrears are cleared before you apply.38 Unreported side income that later produces back tax can therefore affect a future application.
A separate question is whether the side work itself is allowed. Foreign nationals residing under work or student statuses who run an income-generating business, or receive pay for activities outside their status, need permission to engage in activities outside their status (資格外活動許可, shikakugai katsudō kyoka).41 The articles Side-Business While Employed: What's Allowed and Can You Freelance on Your Visa? cover that question.
Good to know
Revenue is not income
The 200,000-yen test runs on income, meaning revenue minus necessary expenses, not on gross receipts.32 A gig that brings in 300,000 yen with 120,000 yen of expenses produces 180,000 yen of income, which is under the line.
Filing for a refund pulls small side income onto the return
The 200,000-yen rule only defines when filing is unnecessary. According to the NTA's Q&A on Tax Answer No. 1900, once you file a return for any reason, such as a medical-expense deduction, side income of 200,000 yen or less goes on that return too.14
Selling your own used belongings is usually not taxable
Selling movable property ordinarily needed for daily life, such as furniture, household goods, clothing, or a commuting car, is not taxable and needs no filing; a loss on such a sale is treated as not arising.425 The exception is precious metals, gems, calligraphy and paintings, antiques, and similar items worth over 300,000 yen per item or set.42
Buying and reselling goods continuously for profit is different. That activity is business-related miscellaneous income, or business income if it reaches business scale.9
Holding crypto is not taxed; the first swap is
Unrealized gains on crypto you simply hold are not taxed. The common surprise is a token-to-token swap or a purchase paid in crypto: each is a taxable transfer valued in yen at the time, even though no yen is received to pay the resulting tax.1
Your employer may see the total on your residence-tax notice
Residence tax for salaried people is withheld by the employer through special collection from June to May.16 Unless you choose ordinary collection on your return, residence tax on side income is added to the amount your employer withholds; the ordinary-collection option covers only non-salary, non-pension income.34
Which crypto rules apply to which income year
The 20% regime applies only to transfers on or after its start date, January 1 of the year after the amended FIEA takes effect; earlier income years remain under progressive comprehensive taxation.24 The cabinet order fixing that date had not been issued, so the start is January 1, 2027 or January 1, 2028 (as of October 2026; confirm current figures with the Financial Services Agency).252826
Tie the rule to the income year, not the filing year. Gains on transfers made before the start date stay under the progressive rates, even on a return filed after the start date.24
See also
- The Financial and Tax Criteria for Permanent Residency
- Work Permission by Status of Residence
- Blue-Form vs. White-Form Tax Returns
- Withholding and Year-End Adjustment in Japan
- Zeirishi: Tax Accountants in Japan
- Secondhand Buying and Selling in Japan: Mercari, Jimoty, and Recycle Shops