Tax Guide for Germans Living in Japan

Abmeldung and tax residency 住民登録抹消と税務上の居住地

The most important thing for Germans to understand: Germany uses residence-based taxation, not citizenship-based taxation. Once you deregister from Germany and become a non-resident, Germany generally stops taxing you on your worldwide income. You will only file and pay taxes in Japan.

The Abmeldung process

When you move from Germany to Japan, you are required by German law to deregister (Abmeldung) at your local Einwohnermeldeamt (residents' registration office) within two weeks of leaving Germany. This is a critical step:

• Abmeldung terminates your Wohnsitz (residence): Under German tax law (EStG §1), you are subject to unlimited tax liability (unbeschränkte Steuerpflicht) if you have a Wohnsitz or gewöhnlicher Aufenthalt (habitual abode) in Germany. The Abmeldung formally ends your Wohnsitz.
• Gewöhnlicher Aufenthalt: Even without a Wohnsitz, you may still be considered a German tax resident if you spend more than 183 days in Germany within a calendar year (or 6 consecutive months). Since you are moving to Japan full-time, this should not apply.
• Abmeldebescheinigung: You receive a confirmation of deregistration. Keep this document — you may need it to prove your departure date to the German tax authorities (Finanzamt) and to claim non-resident status.

Important caveat — keeping a home in Germany: If you maintain a dwelling (Wohnung) in Germany that remains available for your use — even if you do not actually live in it — the Finanzamt may argue you still have a Wohnsitz in Germany and are subject to unlimited tax liability. This is one of the most common traps for German expatriates. If you keep an apartment in Germany (even if family uses it), you may still be treated as a German tax resident.

Becoming a Japanese tax resident

Japan determines tax residency based on your 住所 (domicile) or 居所 (place of residence). If you have a 住所 in Japan (generally interpreted as living in Japan with the intention to stay for at least 1 year), you are a Japanese tax resident from day one. There is no minimum day count — your intention to stay is what matters. (国税庁タックスアンサー No.2010)

Filing in Germany ドイツでの申告義務

Once you are a German non-resident (beschränkt steuerpflichtig), you only owe German tax on German-source income (inländische Einkünfte) as defined in EStG §49. You generally do not need to file a German tax return unless you have such income.

Situations where you may still need to file in Germany:

• Year of departure: You must file a German return for the year you leave. Income earned while you were a German resident is subject to unlimited tax liability. Income after your departure is subject to limited tax liability (only German-source income). The Finanzamt may allow a split-year calculation.
• German rental income: If you own property in Germany and receive rental income, it is German-source income subject to German tax. You must file a German return (Einkommensteuererklärung) to report the net rental income. German rental income is taxed at graduated rates for non-residents (starting at 14%).
• German employment income: If you continue to perform work in Germany (business trips, consulting days, etc.), that income may be German-sourced.
• German business income: If you have a permanent establishment (Betriebsstätte) or carry on a trade or business in Germany.
• Sale of German real property: Capital gains on German property held for less than 10 years (the Spekulationsfrist) are subject to German tax. See the property section below.
• German pension income: German pension payments are partially taxable in Germany under the DBA — see the pension section below.

Germany-Japan tax treaty 日独租税条約

The Germany-Japan Doppelbesteuerungsabkommen (DBA) is one of the oldest bilateral tax treaties Japan has — originally signed in 1966 and revised by the 1979 protocol. While it is not as modern as some of Japan's newer treaties, it provides a solid framework for preventing double taxation.

Key treaty rates:

Key treaty provisions:

• Employment income: Taxed in the country where the work is performed, with the standard 183-day short-stay exception.
• Pensions: The Germany-Japan DBA treats pensions differently from many modern treaties. German social security pensions (gesetzliche Rente) may be taxable in both countries, with the country of residence (Japan) granting a credit for German tax. Private pensions are generally taxable only in the country of residence. The treatment depends on the type of pension — see the pension section for details.
• Capital gains: Gains from real property (Immobilien) are taxed in the country where the property is located. Gains from movable property (shares, etc.) are generally taxed only in the country of residence (Japan).
• Elimination of double taxation: Germany uses the Freistellungsmethode (exemption method) with Progressionsvorbehalt as the primary method, while Japan uses the foreign tax credit method.

German pension (Rentenversicherung) ドイツの年金制度

Germany's pension system is built on three pillars. Understanding how each works when you live in Japan is essential:

Pillar 1: Gesetzliche Rentenversicherung (statutory pension insurance)

This is the core German pension — the one you contributed to through your employer (18.6% of gross salary, split equally between employer and employee). Key points for Germans in Japan:

• Your contributions are preserved: All Beitragsjahre (contribution years) you accumulated while working in Germany remain on your Rentenkonto. They do not expire because you move abroad.
• Minimum qualification: You need at least 5 years (60 months) of Beitragszeiten to qualify for any pension (allgemeine Wartezeit). The totalization agreement with Japan can help you meet this minimum (see below).
• Voluntary contributions (freiwillige Beiträge): As a non-resident German citizen, you can continue making voluntary contributions to the Deutsche Rentenversicherung. This can increase your future pension. Monthly voluntary contributions range from €96.72 to €1,404.30 (2024). This may be worth considering if you need to fill gaps in your contribution record.
• Receiving the pension in Japan: German pension payments (Rente) are paid to you worldwide, including to a Japanese bank account. The Deutsche Rentenversicherung transfers payments internationally.
• Tax treatment: Under the DBA, German statutory pension payments may be taxable in both Germany and Japan. Germany taxes a portion of the pension (the taxable share depends on your first year of payment — for pensions starting in 2026, approximately 86% is taxable in Germany). Japan also taxes the full pension as income. Japan grants a foreign tax credit (外国税額控除) for German tax paid, preventing double taxation. In practice, you may owe a small net tax to Germany and the remainder to Japan.

Pillar 2: Betriebliche Altersvorsorge (company pension)

If you participated in a company pension scheme (Direktversicherung, Pensionskasse, Pensionsfonds, etc.), your entitlements remain. When you eventually receive payments, they are generally taxable only in your country of residence (Japan) under the DBA. Contact your former employer's pension provider to understand your vested benefits and how to receive payments abroad.

Pillar 3: Private Altersvorsorge (private pension)

Private pension products like Riester-Rente and Rürup-Rente (Basisrente) have specific implications:

• Riester-Rente: When you leave Germany and lose unlimited tax liability, you lose eligibility for the Zulage (government bonus) and the Sonderausgabenabzug (tax deduction). More critically, you may be required to repay all Zulagen and tax benefits received if you withdraw or terminate the contract (schädliche Verwendung). If you keep the contract running, the benefits are "frozen" — no new contributions receive subsidies, but existing entitlements are preserved. Payouts are generally taxable in Japan under the DBA.
• Rürup-Rente: The contract continues to exist. Payouts (only as a lifelong annuity, not lump sum) begin at retirement age and are generally taxable in Japan under the DBA. You cannot withdraw early.

Health insurance (Krankenversicherung) 健康保険（ドイツの医療保険）

Germany's health insurance system is complex, and leaving Germany has specific implications depending on whether you were in the gesetzliche Krankenversicherung (GKV — statutory health insurance) or private Krankenversicherung (PKV — private health insurance).

GKV (statutory health insurance)

When you move to Japan and are no longer employed in Germany, your GKV membership ends. You cannot maintain GKV membership while living abroad (with limited exceptions for posted workers). When you return to Germany, you can re-enroll in GKV if you take up employment subject to social insurance contributions, or if you meet the conditions for Pflichtversicherung.

PKV (private health insurance)

If you were privately insured, you have an important option: the Anwartschaftsversicherung (dormant policy / expectancy insurance). This allows you to suspend your policy while abroad, preserving your:

• Alterungsrückstellungen: Your accumulated age reserves (the savings component that keeps premiums lower as you age). Without the Anwartschaft, you lose these reserves and must restart from scratch if you return.
• Health status at departure: The Anwartschaft freezes your risk assessment. When you return, you re-enter at your departure health status — any conditions that developed while abroad are covered without new Risikozuschläge (risk surcharges).
• Right to re-enter without waiting periods: You can reactivate your policy without new Wartezeiten.

The Anwartschaft comes in two forms:

• Kleine Anwartschaft (small): Preserves your right to re-enter and your risk status but does NOT preserve Alterungsrückstellungen. Cost: typically €30-80/month.
• Große Anwartschaft (large): Preserves everything including Alterungsrückstellungen. Cost: typically €150-300+/month. More expensive but recommended for long stays abroad (5+ years).

In Japan, you will be covered by either:

• 社会保険 (Shakai Hoken) — If you are employed by a company. Your employer pays roughly half, you pay half. Covers health insurance (健康保険) and pension (厚生年金).
• 国民健康保険 (Kokumin Kenko Hoken / NHI) — If self-employed or not covered by employer insurance. Premiums are based on your previous year's income and vary by municipality.

Germany-Japan totalization agreement 日独社会保障協定

Germany and Japan have a Social Security Agreement (社会保障協定 / Sozialversicherungsabkommen) that has been in force since February 1, 2000. It is one of the earlier totalization agreements Japan signed, and it covers pension insurance, with some provisions for health insurance.

1. Eliminating double contributions

• Employed locally in Japan: You pay into the Japanese system (厚生年金 and 健康保険) and are exempt from German Rentenversicherung contributions on that employment.
• Temporarily posted from Germany (Entsendung): If your German employer sends you to Japan for a temporary assignment (up to 5 years, extendable in exceptional cases), you can remain in the German social insurance system. Your employer continues Rentenversicherung contributions and you are exempt from Japanese 厚生年金. You need an Entsendebescheinigung (certificate of coverage) from the Deutsche Rentenversicherung.
• Self-employed: If self-employed in Japan, you generally pay into the Japanese system (国民年金). The agreement ensures you are not also subject to German compulsory Rentenversicherung (though most self-employed persons in Germany are not compulsorily insured anyway).

2. Combining contribution periods

• German pension qualification: The allgemeine Wartezeit for a German pension is 5 years (60 months). If you have fewer than 60 months of German contributions, Japanese pension contribution periods can be counted to meet this minimum.
• Japanese pension qualification: Japan requires 10 years of contribution periods. German Rentenversicherung contribution periods can count toward this minimum.
• Benefit calculation: Totalizing helps you qualify, but each country calculates its pension based only on contributions to its own system. You receive a proportional pension from each country.

German property ドイツの不動産

Many Germans moving to Japan keep property in Germany. Here is how it is taxed:

Rental income (Mieteinnahmen)

Rental income from German property is German-source income and remains taxable in Germany, regardless of where you live. As a non-resident:

• Limited tax liability: You are subject to beschränkte Steuerpflicht (limited tax liability) on the rental income. You must file a German Einkommensteuererklärung to report the net rental income.
• Deductions: You can deduct expenses related to the property (Werbungskosten) — mortgage interest, depreciation (AfA — typically 2% per year for buildings built after 1924, 2.5% for older buildings, or 3% for buildings completed after September 2023 under the new rules), repairs, insurance, management fees, etc.
• Tax rate: Non-residents pay German income tax at graduated rates (starting at 14%) on the rental profit, with no Grundfreibetrag (basic personal allowance) unless they elect to be treated as unbeschränkt steuerpflichtig under EStG §1(3) — which requires that at least 90% of their worldwide income is subject to German tax or their non-German income does not exceed the Grundfreibetrag (€11,604 in 2024).
• Japan reporting: Report the German rental income on your Japanese 確定申告 and claim a foreign tax credit (外国税額控除) for German tax paid.

Selling German property

Capital gains on German property are treated differently depending on how long you held it:

• Spekulationsfrist (speculation period) of 10 years: If you sell the property within 10 years of purchase, the capital gain is taxable in Germany as a private Veräußerungsgeschäft (EStG §23). This applies to non-residents as well.
• After 10 years: If you sell the property more than 10 years after purchase, the capital gain is completely tax-free in Germany. This is one of the most favorable rules in the German tax system and applies regardless of your residence status.
• Self-occupied property exception: If the property was used exclusively for your own residential purposes in the year of sale and the preceding two years, the gain is tax-free even within the 10-year period.
• Japan reporting: As a Japanese tax resident, you must report the capital gain on your 確定申告. If Germany taxes the gain (sold within 10 years), you claim a foreign tax credit in Japan. If Germany does not tax it (sold after 10 years), Japan still taxes the gain — there is no corresponding exemption in Japanese tax law.

NISA for Germans ドイツ人のためのNISA

Japan's NISA (少額投資非課税制度) is an excellent deal for Germans — with none of the complications that plague US citizens.

• No PFIC issues: Germany does not have US-style "Passive Foreign Investment Company" rules. You can invest in Japanese mutual funds (投資信託) through NISA without triggering punitive German tax treatment. Unlike US citizens who must avoid Japanese funds, you are free to use eMAXIS Slim, SBI V Series, or any other popular Japanese index fund.
• Genuinely tax-free: Since you are a Japanese tax resident and German non-resident, NISA gains are tax-free in Japan, and Germany has no claim to tax them. There is no Abgeltungsteuer on NISA gains — your investment income within NISA is completely tax-free from both countries' perspectives.
• Better than German Freistellungsauftrag: Germany's Sparerpauschbetrag (saver's lump sum) exempts only €1,000 (single) / €2,000 (married) of investment income from Abgeltungsteuer. NISA's ¥18M lifetime cap with unlimited tax-free gains is vastly more generous.
• Full access to both NISA envelopes: You can use both the つみたて投資枠 (¥1.2M/year for index funds) and 成長投資枠 (¥2.4M/year for stocks, ETFs, and funds). No German tax complications with either.

If you return to Germany: Your NISA account will be frozen (no new contributions). The investments remain, but you may need to eventually sell and transfer the proceeds. Capital gains that accrued in NISA while you were a Japanese tax resident and German non-resident should generally not be retroactively taxed by Germany. However, once you return to Germany and become a German tax resident again, any gains on the investments from that point forward may be subject to Abgeltungsteuer upon sale. Consult a Steuerberater regarding the specific timing of any sale.

Frequently asked questions よくある質問

Do I need to do Abmeldung before leaving Germany?

Yes. Under the Bundesmeldegesetz (BMG §17), you are required to deregister (Abmeldung) within two weeks before or after leaving Germany if you do not have another residence in Germany. Visit your local Einwohnermeldeamt or Bürgerbüro with your ID and proof of move. You will receive an Abmeldebescheinigung. Failure to deregister can result in fines and may cause complications with your tax residency status.

Can I keep my German bank accounts?

Yes, most German banks allow non-residents to maintain accounts, though some may restrict certain services. Update your address with the bank and notify them of your non-resident status. Interest on German bank accounts is subject to Abgeltungsteuer (26.375% including Solidaritätszuschlag), but as a non-resident you can apply for a Freistellung under the DBA, reducing the withholding to the treaty rate of 10%. You must provide a Wohnsitzbescheinigung (certificate of residence) from the Japanese tax office. Report the interest on your Japanese 確定申告 and claim a foreign tax credit.

What about my German Depot (investment account)?

You can keep a German brokerage account (Depot), but you should notify the bank of your non-resident status. Capital gains on shares held in a German Depot by non-residents are generally not taxable in Germany (only German real property gains are taxed). Dividends from German stocks are subject to Kapitalertragsteuer, reduced to 15% under the DBA. You report dividends and capital gains on your Japanese 確定申告 and claim foreign tax credits for German withholding.

Should I continue making voluntary Rentenversicherung contributions?

It depends on your situation. Voluntary contributions build your German pension entitlement — each year of contributions at the average level adds roughly €38 per month to your pension (2024 values). At a cost of approximately €650/month (Durchschnittsbeitrag), the payback period is about 17 years from retirement — longer than the UK's NI contributions but still reasonable given the pension is paid for life and indexed to wage growth. If you plan to eventually receive a German pension and have gaps in your contribution record, voluntary contributions may make sense. Consult a Rentenberater.

I am a dual German-Japanese citizen. Any special considerations?

Your tax obligations are determined by tax residence, not citizenship. As a Japan-resident without a Wohnsitz or gewöhnlicher Aufenthalt in Germany, you file and pay taxes in Japan on your worldwide income. Your German citizenship does not create a German filing obligation (unlike US citizenship). Note: Germany generally does not permit dual citizenship with Japan (with exceptions for those who obtained it before the rules changed or through birth). If you hold both citizenships, verify your status with the German authorities.

I am leaving Japan and returning to Germany. What should I do?

File your final Japanese 確定申告 (or appoint a 納税管理人 to file after you leave). Consider claiming the pension refund (脱退一時金) if you contributed to 厚生年金 or 国民年金 for at least 6 months — this refund is taxable in Germany in the year received. Close or decide what to do with Japanese bank and brokerage accounts. Your NISA account will be frozen. Upon returning to Germany, register at the Einwohnermeldeamt (Anmeldung) and re-enroll in health insurance (GKV or reactivate your PKV Anwartschaft). See our Leaving Japan tax guide for the complete checklist.