Foreign tax credit (外国税額控除) — how it works

If you paid tax abroad on income that Japan also taxes, you can claim a foreign tax credit (外国税額控除) to prevent double taxation.

Mechanics

The credit is capped by a share-limit:

credit = min(foreign_tax_paid, japan_income_tax × foreign_income / total_income)

NPR quirk

For Non-Permanent Residents, only the remitted portion of foreign income enters the Japanese taxable base — so only that portion counts in the share-limit numerator. Foreign tax paid on income that was not remitted yields no credit in Japan (it also wasn't taxed in Japan, so no double-tax to relieve).

Treaty forms

Tax treaties often reduce source-country withholding below the domestic rate. To claim that reduced rate at source, you file a 租税条約届出書 (treaty notification). Different income types use different forms (250 for dividends, 251 for interest, etc.). The package picks the right ones automatically from your wizard answers.