Japan Tax Representative Guide for Overseas Investors Buying Real Estate

This guide explains Japan’s tax representative system for overseas investors buying real estate. Learn the key requirements, documentation, and steps to ensure compliance and smooth property transactions.

Definition: Who is an “Overseas Investor”?
In this guide, the term refers to Individual Non-residents (those without a domicile in Japan more than one year) and Foreign Corporations (entities with head offices outside Japan). Under Japanese law, both categories are subject to specific tax representative requirements.

Overview of the Tax Representative System in Japan

What sets Japan apart is that the Tax Representative System (known as Nōzei Kanrinin) is explicitly defined by law — specifically under the Income Tax Act (Article 117) and the Corporation Tax Act (Article 148).

The law states that overseas investors without an address or office in Japan must appoint a tax representative and file a notification with the tax office before proceeding with tax filings or payments. This person becomes your official point of contact for the Japanese tax authorities.

Finding and Appointing Your Tax Representative

Legally, the Japanese tax system does not set specific qualifications for a Tax Representative; any resident in Japan can be appointed to the role.

In practice, however, a CPA or CPTA (Zeirishi) is generally appointed. The reason is that a tax professional can accurately understand the client’s tax position and the content of official notices from the tax authorities, which are complex and written only in Japanese.

For overseas investors, finding a local Japanese tax accountant for this role can be challenging. Most local accountants do not use English, while large international firms (like the Big 4) may not accept such engagements or may charge very high fees. Because of this, some overseas investors may ask an acquaintance or a real estate agent to act as their representative.

Nozaki CPA & Tax Firm is a local Japanese firm specifically structured to meet this particular demand from overseas property owners at a simple, fixed fee.

Taxes When Buying and Owning Real Estate in Japan

Acquisition Taxes for Overseas Investors

Overseas investors buying real estate in Japan typically face the following taxes:

Annual Property Taxes and Income Tax Obligations

Overseas investors owing real estates in Japan will be liable for:

Tax Representative Notification Filing: Mandatory

Filing Requirements with Local Governments (Fixed Asset Tax)

When purchasing real estate, overseas investors must file a Tax Representative Notification with the municipality. This ensures fixed asset tax notices are properly delivered and payments processed.

Filing Requirements with National Tax Authorities (Income Tax)

If rental or other income requires an income tax return, overseas investors must file a Tax Representative Notification with the national tax office before filing the tax return. This allows the representative to handle all tax compliances on behalf of the overseas investors.

Our Services: Nozaki CPA & Tax Firm

At Nozaki CPA & Tax Firm, we are providing this Tax Representative service at a simple, fixed fee.

In addition to Tax Representative Services, we offer the “PropTax Japan” package. This is designed for overseas investors who require full Japanese tax compliance, including tax returns, and who need us to coordinate directly with tax accountants in their home countries.

Frequently Asked Questions (FAQs)

Q: Do overseas investors need a tax representative when buying real estate in Japan?

A: Yes, absolutely. Japanese tax authorities generally do not mail tax notices internationally. Therefore, you must appoint a Japanese resident Tax Representative to receive bills and ensure payment. Without one, you risk missing the Real Estate Acquisition Tax notice (which arrives months after purchase) and annual Fixed Asset Tax bills, leading to delinquencies and penalties.

Q: Which authority handles the tax representative filing in Japan?

A: It depends on the tax type, often requiring two separate filings.
For Fixed Asset Tax, you must register with the local municipality (e.g., Tokyo Metropolitan Government
For Income Tax, you must register with the National Tax Agency.