The Tax Reality I Only Discovered After Moving to Japan

I arrived in Japan in August 2022. To be honest, tax was one of the last things on my mind.

Like most people moving to a new country, I was focused on finding somewhere to live, settling into work, improving my Japanese, and adapting to daily life. I did not spend much time thinking about tax.

Before moving to Japan, I had spent many years living in Hong Kong. As a result, tax was never something I thought about very deeply. As long as I paid what I was supposed to pay, I rarely gave it much attention.

Looking back, that mindset probably left me unprepared for what I would later discover.

The biggest problem was not that I misunderstood the rules. The biggest problem was that I did not even know what I did not know.

Nobody sits you down at the airport and explains how the Japanese tax system works. Nobody tells you that you may need to understand concepts such as tax residency, overseas income, capital gains, remittances, resident tax, or the treatment of overseas assets. You are simply expected to figure it out for yourself.

Even now, the phrase that comes to mind is: you do not know what you do not know.

When I first arrived in Japan, I had no idea how many tax-related issues could potentially affect a foreign resident. I certainly did not realise how much responsibility falls on the individual to understand their own situation.

As time went on, I found myself asking more and more questions. What exactly counts as a remittance? How are overseas investments treated? How are capital gains calculated? How do exchange rates affect taxation? What reporting obligations might apply to foreign residents? These were not questions I had spent much time thinking about before moving to Japan.

Eventually, I sought help from a tax accountant because many of the rules were far more complex than I had expected. Even today, I continue to rely on professional advice when dealing with areas that fall outside my expertise.

One thing that surprised me was how different Japan's system can be from systems that foreigners may be familiar with elsewhere. Assumptions that seem perfectly reasonable in one country do not necessarily apply in another. Something that appears simple on the surface can become much more complicated once overseas income, foreign investments, exchange rates, or international reporting obligations become involved.

Another surprise was discovering how many tax-related issues can arise long after you have arrived. New residents often focus on their salary and immediate living expenses. However, there may be other matters that deserve attention as well. Some people are surprised by the timing of certain tax obligations. Others are surprised by reporting requirements, the treatment of overseas assets, or the way foreign investments are taxed.

This article is not tax advice. I am not a tax professional. It is simply a reflection on my own experience of moving to a country with a tax system that was very different from the one I had been used to.

If there is one lesson I have learned, it is that not knowing can be expensive.

Not because anyone is trying to catch you out, but because the system generally expects individuals to understand their obligations and take reasonable steps to comply with them.

If I could tell my 2022 self one thing, it would be this: start learning earlier. Ask questions. Keep records. Read as much as you can. And if you are unsure about something, seek professional advice. Looking back, I think that would have saved me a great deal of confusion.

Most importantly, do not assume that because something worked one way in your previous country, it will work the same way in Japan.

The biggest lesson Japan taught me about tax was not a technical one.

It was the realisation that you do not know what you do not know.

And leaving things that way may be the biggest risk of all.