Foreign dividends and gains, source-country withholding, foreign tax credits, FX conversion, and foreign brokerage accounts.
As a Japan resident, your foreign investment income is generally subject to Japanese tax outside NISA and may also face source-country withholding; foreign tax credits can relieve some double taxation through a Japanese return, and you must convert and record everything in yen.
Japan taxes its residents on worldwide income. So outside NISA, your foreign dividends and capital gains are generally subject to Japanese tax just like domestic ones, at the applicable rates. On top of that, many countries withhold tax at source on dividends paid to foreign investors — US dividends, for instance, commonly carry US withholding.
The result can be double taxation: the source country withholds, and Japan taxes the same income. NISA removes the Japanese layer for qualifying holdings but never the foreign one, so foreign-source withholding can remain even inside NISA.
To relieve double taxation, Japan’s foreign tax credit system can let you credit some foreign tax paid against your Japanese tax — but this generally requires filing a Japanese return and meeting the conditions. Because NISA leaves no Japanese tax on qualifying income, a credit may not recover foreign withholding on NISA holdings, which is a reason to model after-withholding results.
Everything must be converted to yen. Use appropriate exchange rates for income and for acquisition/disposal, and keep records of the amounts and rates. FX conversion also affects your gain calculation on foreign-currency securities, since both the asset price and the exchange rate move.
Holding assets at a foreign brokerage is legal for a resident but adds complexity: Japanese tax still applies to your worldwide income, and you take on Japanese filing, remittance procedures, cross-border estate exposure, and different (or weaker) regulatory and investor-protection frameworks. A foreign account is not a way to avoid Japanese tax.
These situations are fact-specific and can involve treaty provisions, reporting obligations, and estate-tax exposure on foreign-situated assets. Where foreign income or accounts are material, get individual cross-border tax advice rather than relying on general guidance.
Brokerage (NISA/iDeCo) · Rakuten Securities
A leading low-cost brokerage for NISA and index-fund investing, integrated with Rakuten points and Rakuten Bank.
Fees: Many domestic funds and trades are low- or no-commission — verify current fee schedule.
Brokerage (NISA/iDeCo) · SBI Securities
Japan’s largest online brokerage by accounts, with a very broad low-cost fund lineup and full NISA/iDeCo support.
Fees: Many trades and funds are low- or no-commission — verify current fee schedule.
Brokerage (NISA/iDeCo) · Monex
An established online brokerage often chosen for US-stock access and research tools, with NISA and iDeCo support.
Fees: Commissions vary by product; some funds/trades are low-cost — verify current schedule.
Be very careful. Japanese mutual funds and ETFs are usually PFICs (Passive Foreign Investment Companies) for US tax, which triggers punitive US taxation and heavy Form 8621 reporting — and the NISA tax exemption does not apply to the US. Many US persons in Japan avoid Japanese pooled funds and instead hold US-domiciled assets, but rules are complex. Get advice from a cross-border US/Japan tax professional before investing.