Tax Guide for Koreans Living in Japan

Tax residency: Korea vs Japan 韓国と日本の税務上の居住地

Korea uses residence-based taxation, not citizenship-based taxation. Unlike the US (which taxes citizens worldwide regardless of where they live), Korea only taxes your worldwide income if you are a Korean tax resident. Once you establish Japanese tax residency and cease Korean tax residency, you file taxes only in Japan.

Korean tax residency rules

Under the Korean Income Tax Act (소득세법), you are a Korean tax resident if you have a domicile (주소) in Korea or have maintained a place of residence (거소) in Korea for 183 days or more. The domicile test considers factors such as:

• Whether you maintain a home in Korea available for your use.
• Whether your family (spouse, dependent children) resides in Korea.
• Whether your assets and economic activities are primarily in Korea.
• Whether your employment or business is based in Korea.

For most Korean citizens who have moved to Japan full-time — working for a Japanese employer, living in a Japanese apartment, with no home maintained in Korea — establishing Japanese tax residency and losing Korean tax residency is straightforward. If your family remains in Korea or you maintain a home there, the determination becomes more complex.

Japanese tax residency

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 183-day waiting period in Japan; your intention to stay is the key factor. (国税庁タックスアンサー No.2010)

Korean filing obligations 韓国での申告義務

Once you are a Korean tax non-resident, you only need to file a Korean tax return if you have Korea-source income. Common types of Korea-source income that may require filing:

• Korean rental income: If you own property in Korea and earn rent, that income is taxable in Korea.
• Korean employment income: If you perform any work in Korea (even temporarily), the income attributable to work performed in Korea is Korea-source.
• Korean financial income: Interest from Korean bank accounts and dividends from Korean stocks are subject to withholding tax at source. If withholding covers the tax, you may not need to file a separate return.
• Capital gains on Korean assets: Selling Korean real estate or certain Korean shares triggers Korean capital gains tax.

If you have no Korea-source income, you generally do not need to file in Korea at all. Your Japan salary and Japan-source income are not taxable in Korea as a non-resident.

The Korean tax year runs from January 1 to December 31 (same as Japan). The Korean filing deadline for individuals is May 31 of the following year. In Japan, your 確定申告 is due by March 15.

Korea-Japan tax treaty 日韓租税条約

Korea and Japan have a comprehensive tax treaty (Convention for the Avoidance of Double Taxation) that has been in force since 1998, with a significant revision effective in 2021 that modernized rates and provisions. The treaty is one of the most actively used in Japan's treaty network, given the large Korean community in Japan.

Key treaty rates (revised 2021 treaty):

Key treaty provisions:

• Employment income: Taxed only in the country where the work is performed (with the usual 183-day short-stay exception). Your Japan salary is taxed only in Japan.
• Pensions: Generally taxable only in the country of residence. If you live in Japan and receive a Korean pension, Japan has the primary taxing right.
• Capital gains: Gains from real property are taxed in the country where the property is located. Gains from shares of companies deriving more than 50% of value from real property can also be taxed in the property's country.
• No saving clause: The Korea-Japan treaty does not have a US-style "saving clause." Korea does not claim the right to tax your worldwide income based on citizenship alone. Once you are a Japanese tax resident and Korean non-resident, the treaty applies cleanly.

Korean National Pension (국민연금) while in Japan 韓国の国民年金

Korea's National Pension Service (국민연금공단, NPS) administers the mandatory pension system. When you move to Japan and cease Korean employment, your Korean National Pension contributions pause. Here is what you need to know:

Your Korean pension while abroad

• Contributions stop: When you leave Korea and are no longer employed by a Korean company, mandatory contributions to 국민연금 cease. Your accumulated contributions remain in the system.
• Voluntary contributions: Korean citizens living abroad can make voluntary contributions (임의가입) to the NPS to continue building their pension entitlement. This can be valuable if you need more contribution months to meet eligibility thresholds.
• Minimum qualification: The Korean National Pension requires a minimum of 10 years (120 months) of contributions to receive the old-age pension. If you have fewer than 10 years, you receive a lump-sum refund when you reach pension age (currently 63, rising to 65 by 2033).
• Pension age: The Korean old-age pension is payable from age 63 (born 1961-1968), rising to 64 (born 1969-1976) and 65 (born 1977 onwards). Earlier claim (reduced pension) is available from 5 years before the full pension age.

Lump-sum refund option

Unlike some countries' pension systems, the Korean NPS allows foreign nationals (and Korean nationals who have permanently emigrated) to claim a lump-sum refund (반환일시금) of their contributions if they leave Korea and do not meet the minimum contribution period. However, Korean citizens who remain citizens typically cannot claim a lump-sum refund simply by living abroad — the pension remains in the system until you reach pension age. This is an important distinction from Japan's pension refund (脱退一時金), which is available to foreign nationals who leave Japan.

Korean health insurance (NHIS) 韓国の健康保険

Korea's National Health Insurance Service (국민건강보험공단, NHIS) provides universal health coverage. When you move to Japan, your Korean health insurance status changes:

• Suspension while abroad: If you report your overseas departure (해외출국) to the NHIS, your Korean health insurance can be suspended. During suspension, you do not pay premiums and are not covered. This is the recommended approach for long-term residents of Japan.
• Automatic suspension: If you are abroad for more than a certain period without reporting, the NHIS may suspend your coverage automatically. However, it is better to report proactively to avoid any premium arrears.
• Reactivation: When you return to Korea (permanently or for extended stays), you can reactivate your NHIS coverage. Reactivation is generally immediate for Korean citizens upon re-registering your domestic address.
• Short visits to Korea: During short visits to Korea, you are not covered by NHIS if your coverage is suspended. Purchase travel insurance for visits, or consider maintaining NHIS coverage if you visit Korea frequently (though this means continuing to pay premiums).

In Japan, you will be covered by either:

• 社会保険 (Shakai Hoken) — If 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 between jobs. Premiums are based on your previous year's income and vary by municipality.

Korea-Japan totalization agreement 日韓社会保障協定

Korea and Japan have a Social Security Agreement (사회보장협정 / 社会保障協定) that has been in effect since April 2005. This is a full totalization agreement — one of the most comprehensive social security agreements Japan has signed, and a significant advantage for Korean citizens in Japan.

1. Eliminating double contributions

The agreement prevents you from paying pension contributions in both countries simultaneously:

• Employed locally in Japan: You pay into the Japanese system (厚生年金) and are exempt from Korean 국민연금 contributions.
• Temporarily posted from Korea: If a Korean employer sends you to Japan for a temporary assignment (up to 5 years), you can remain in the Korean 국민연금 system and be exempt from Japanese 厚生年金. You need a Certificate of Coverage (적용증명서) from the Korean NPS.

2. Combining contribution periods (totalization)

This is the most valuable feature for Koreans in Japan. The agreement allows you to combine pension contribution periods in both countries to meet minimum qualifying requirements:

• Japanese pension: Japan requires 10 years of pension contributions. If you have 6 years in Japan and 5 years in Korea, you can count both (11 years total) to meet Japan's 10-year minimum. You then receive a proportional Japanese pension based on your 6 years of Japanese contributions.
• Korean pension: Korea requires 10 years (120 months) of contributions. Your Japanese 厚生年金 or 国民年金 periods can count toward this minimum. You receive a proportional Korean pension based on your actual Korean contributions.
• Both pensions: You can potentially receive pensions from both countries — a proportional Japanese 老齢年金 and a proportional Korean 국민연금. Each is calculated independently based on your contributions to that country's system.

Korean property while living in Japan 韓国の不動産

Many Korean citizens in Japan own property in Korea. Korean property tax rules can be complex, especially for non-residents:

Rental income

Rental income from Korean property is taxable in Korea. As a non-resident, the tax is withheld at source or you must file a Korean tax return. Key points:

• Korean filing: Report rental income and pay Korean income tax. Non-residents are generally taxed at a flat rate or the standard progressive rate, depending on whether they have a Korean tax agent (납세관리인).
• Japan filing: Report the same rental income on your Japanese 確定申告 and claim a foreign tax credit (外国税額控除) for Korean tax paid.
• 전세 (jeonse) considerations: If your property is rented under a 전세 arrangement (large lump-sum deposit, no monthly rent), the imputed interest on the deposit may be considered income under certain conditions. The tax treatment of 전세 deposits has become more complex in recent years.

Selling Korean property

Capital gains on Korean real estate are subject to Korean capital gains tax. Key considerations for non-residents:

• Tax rates: Korean capital gains tax on real estate uses progressive rates ranging from 6% to 45% (basic rates), with additional surcharges for multiple property owners or short holding periods. Non-residents are taxed at the higher of the progressive rate or a flat minimum rate (currently 10-20% depending on the type of gain).
• 1-household 1-house exemption (1세대 1주택 비과세): Korean residents who sell their only home (held for 2+ years, lived in for 2+ years) can be exempt from capital gains tax up to ₩1.2 billion. Non-residents generally cannot claim this exemption because they do not meet the residency-in-the-house requirement. This is a significant disadvantage of selling while living abroad.
• Reporting: File a Korean capital gains tax return within 2 months of the sale. Also report on your Japanese 確定申告 with a foreign tax credit for Korean tax paid.

Special considerations: Zainichi Koreans (在日韓国人) 在日韓国人の特別な事情

Zainichi Koreans (在日韓国人 / 재일한국인) occupy a unique position in the Japan-Korea tax and legal landscape. This section addresses the specific considerations for Koreans who were born in Japan or have lived in Japan for generations — often holding Special Permanent Resident (特別永住者) status.

Visa and residency status

Most Zainichi Koreans hold Special Permanent Resident (特別永住者) status, granted under the Special Act on Immigration Control (入管特例法). This status provides nearly all the rights of Japanese citizenship for tax and residency purposes:

• Full Japanese tax residency: Special Permanent Residents are treated as Japanese tax residents. You file 確定申告 in Japan and are taxed on your worldwide income — the same as Japanese citizens.
• No Korean tax obligations (usually): If you were born and raised in Japan and have never been a Korean tax resident, you generally have no Korean filing obligations on your Japan-source income. Korea considers you a non-resident. You would only owe Korean tax if you have Korea-source income (Korean property, Korean investments, etc.).
• Social insurance: You participate in Japan's social insurance system (厚生年金 and 健康保険, or 国民年金 and 国民健康保険) on exactly the same basis as Japanese citizens.

Inheritance and gift tax

Inheritance and gift tax is where Zainichi Koreans face particular complexity:

• Japan side: As long-term residents with a 住所 in Japan, Zainichi Koreans are subject to Japanese inheritance tax (相続税) and gift tax (贈与税) on worldwide assets — the same scope as Japanese citizens. The "10-year rule" (国外財産に対する課税) applies similarly.
• Korea side: Korea also imposes inheritance and gift tax, and its rules extend to assets of Korean nationals regardless of where they reside. This can create double taxation on inheritance — particularly for assets in Korea. The Korea-Japan tax treaty covers income taxes but does not cover inheritance or gift taxes (there is no separate Japan-Korea inheritance tax treaty).
• Applicable law: Under Korean civil law, inheritance of a Korean national's assets is governed by Korean inheritance law (한국 민법). Under Japanese conflict-of-laws rules, the national law of the deceased applies (法の適用に関する通則法 Article 36). This means Korean inheritance law may apply to the estate of a Zainichi Korean, even though they lived their entire life in Japan.

Korean military service (병역)

This is not a tax issue, but it is a critical consideration for male Zainichi Koreans. Korean male citizens are generally subject to military service obligations (병역의무). Zainichi Koreans who have maintained their Special Permanent Resident status and have never registered as a Korean resident (재외국민등록) or entered Korea on a Korean passport after age 18 may be exempt from military service under certain conditions. However, the rules are complex and have changed over time. This is a legal matter that requires consultation with a specialist in Korean military service law, not a tax advisor.

Frequently asked questions よくある質問

Can I use NISA as a Korean citizen?

Yes. Korean citizens living in Japan can fully use NISA (少額投資非課税制度) with no complications. Korea does not have US-style PFIC rules, so you can invest in Japanese mutual funds through NISA without any adverse Korean tax consequences. Since you are a Korean non-resident, Korea has no claim to tax your NISA gains. NISA gains are tax-free in Japan. This makes NISA a genuinely tax-free investment vehicle for Korean citizens — use it.

Do I still need to file in Korea if I only have Korean bank interest?

Korean banks withhold tax on interest at source (typically 15.4% — 14% income tax plus 1.4% local tax). For non-residents, the withholding rate is adjusted (generally 20% for non-residents, reducible to 10% under the treaty). If the tax withheld at source covers your full Korean tax liability on that income, you generally do not need to file a separate Korean return. However, you must report the interest on your Japanese 確定申告 as worldwide income and claim a foreign tax credit for the Korean withholding.

What about my Korean National Pension (국민연금)?

Your accumulated 국민연금 contributions remain in the Korean system. Thanks to the totalization agreement, your Japanese pension contribution years count toward the Korean 10-year minimum. If you have enough combined years, you will receive a proportional Korean pension when you reach pension age. Consider making voluntary contributions (임의가입) to maximize your Korean pension entitlement, especially if you are close to the 10-year threshold.

I am a Zainichi Korean with Special Permanent Resident status. Do I file in Korea?

If you were born and raised in Japan and have no Korea-source income (no Korean property, bank accounts, investments, or employment), you generally do not need to file a Korean tax return. You are a Japanese tax resident and a Korean non-resident. File only in Japan. If you do have Korea-source income (for example, inherited Korean property that generates rent), you will need to file in Korea for that income.

I am leaving Japan and returning to Korea. What should I prepare?

File your final Japanese 確定申告 (or appoint a 納税管理人 to file after you leave). If you are a foreign national (not Special Permanent Resident) and contributed to 厚生年金 or 国民年金 for at least 6 months, consider the pension refund (脱退一時金) — but weigh this carefully against the totalization agreement benefit (keeping the years may be more valuable). Reactivate your Korean NHIS coverage upon return. Register your Korean address (전입신고). See our Leaving Japan tax guide for the complete checklist.

Can I send money from Japan to Korea easily?

Yes. Remittances from Japan to Korea are straightforward. There are no Japanese restrictions on outbound remittances (though transactions over ¥1 million require reporting to the Bank of Japan). Services like SBI Remit, Wise, and major banks offer Japan-to-Korea transfers with competitive rates. Korea does not impose special taxes on inbound remittances. The funds arrive in KRW and can be deposited into any Korean bank account. On the Korean side, reporting may be required for large amounts under Korean foreign exchange regulations, but routine remittances are processed without issue.