Tax Compliance for Highly-Skilled Professionals in Japan with an Annual Income of 8 Million Yen or More#
Japan’s system for Highly-Skilled Professionals (HSPs) aims to attract foreign talent with specialized knowledge and skills to contribute to the nation’s economic growth. Individuals with high annual incomes are often given preferential treatment under the points-based system, potentially enjoying benefits such as an expedited path to permanent residency. However, in return for this anticipated contribution, they are held to an extremely high standard of fulfilling their public duties as members of Japanese society. Among these duties, “tax accuracy” is of paramount importance. This article provides an objective explanation of the tax-related requirements that high-income professionals, particularly those earning 8 million yen or more, face during immigration reviews.
The Highly-Skilled Professional System and Fulfillment of Public Duties#
Visas for Highly-Skilled Professionals and other pathways to permanent residency evaluate applicants by converting their academic background, work history, and annual income into points. Annual income is a critical factor; exceeding benchmarks such as 8 million or 10 million yen can award significant points, providing an advantage in obtaining and maintaining a status of residence.
However, the Immigration Services Agency of Japan rigorously examines whether an applicant complies with Japanese laws and properly fulfills their public duties, especially during the review for a Permanent Resident (PR) application. The payment of taxes, as well as pension and health insurance premiums, forms the cornerstone of these public obligations. Earning a high income implies a corresponding duty to pay a substantial amount of tax. Whether this duty is fulfilled sincerely is seen as a key indicator of an applicant’s stability and commitment to Japanese society.
What “Tax Accuracy” Specifically Entails#
In the context of an immigration review, “tax accuracy” means more than just the act of paying taxes. It is a comprehensive evaluation based on the following three key elements.
1. Proper Tax Filing#
The fundamental premise is that all income is declared correctly. A point of particular caution is the application of deductions for dependents. For instance, if an applicant claims a large number of dependents residing overseas, they must be able to prove the dependency with objective evidence, such as records of financial remittances and confirmation that those relatives are not being claimed as dependents by someone else. Claiming excessive deductions that result in an unusually low tax amount relative to one’s income risks being judged as improper filing. The higher the annual income, the more closely the consistency of such declarations tends to be scrutinized.
2. Adherence to Payment Deadlines#
Secondly, it is required that assessed taxes are paid in full by the stipulated deadlines. Residence tax (e.g., special ward tax and metropolitan tax) is collected either through “special collection” (deducted directly from salary) or “ordinary collection” (paid by the individual using payment slips). With ordinary collection, it is not uncommon for individuals to inadvertently miss a payment deadline. Even if the full amount is paid later, the fact that a deadline was missed remains on record and can be a negative factor in applications for permanent residency. A single instance of late payment in the past can affect the review, making it essential to always ensure timely payments.
3. No Outstanding Tax Liabilities#
It is, of course, an absolute requirement that there are no unpaid taxes at the time of submitting tax certificates. The review process often requires the submission of tax certificates for the past several years (typically five years for PR applications). The authorities evaluate the applicant’s track record of consistently and reliably fulfilling tax obligations over this entire period.
The Impact of Tax Status on Immigration Reviews#
Failure to fulfill tax obligations or the discovery of inaccurate records can have serious consequences for one’s status of residence.
- Denial of Permanent Residency: The official guidelines for permanent residency explicitly state that applicants must “fulfill public duties.” Late tax payments or improper filings are direct grounds for being judged as non-compliant with this requirement, making a denial of the application highly likely, regardless of a high income or a high point score. In recent years, scrutiny in this area is said to have become particularly stringent.
- Impact on Visa Renewals and Changes of Status: While perhaps not as strict as for PR applications, tax payment status is also checked during reviews for visa renewals or changes of status. In cases of malicious delinquency or fraudulent declarations, there is a non-zero risk that a visa renewal could be denied.
- Diminished Credibility for HSP Points: Even if an applicant earns high points based on their annual income, a failure to sincerely pay taxes commensurate with that income can call the applicant’s overall credibility into question, potentially casting a negative light on the entire application.
Conclusion#
Highly-Skilled Professionals earning substantial incomes of 8 million yen or more are expected not only to contribute to Japan’s economy but also to serve as model members of society who abide by its rules. Taxation is one of the most fundamental public duties for anyone living and working in Japan. To maintain a stable, long-term status of residence and eventually aim for permanent residency, it is imperative to always be conscious of and practice “tax accuracy”—correctly filing income and paying the assessed taxes without a single day’s delay.