This article is part of Zagdim’s wiki series on Japan investment tax. It explains, in plain terms, how gains from selling stocks and funds are taxed in Japan, and who is required to file a return. It is written for anyone considering a move to Japan who already holds stocks or funds, wherever they currently live. For how crypto-asset gains are taxed and reported, see Zagdim’s article on Japan crypto-asset tax (miscellaneous income, filing, and risk notes). For the tax on selling property in Japan, see Zagdim’s article on capital gains tax for foreigners selling property in Japan. For the overall tax picture before and after a move, see Zagdim’s main article on capital gains, property sales, and overseas investment for investors moving to Japan.
**A running example used throughout this article** (the following scenario is fictional and used only to illustrate how the rules apply): Mr. Lin moved to Tokyo and opened an account with a Japanese brokerage. He bought listed shares and units in a publicly offered fund, and he also inherited shares left by his father.
How Is Income From Selling Stocks and Funds Taxed?
In short: gains from selling stocks and funds are taxed separately from your other income.
This method is called self-assessed separate taxation (shinkoku bunri kazei). It means this income is calculated on its own, then taxed through a filed return. The full explanation is in Zagdim’s main article on investor tax before moving to Japan (linked above).
Stocks and funds fall into two categories, and each is calculated separately:
| Category | What It Includes |
|---|---|
| Listed shares, etc. (jōjō kabushiki-tō) | Beneficial interests in publicly offered investment trusts count as this category too, except for specified stock investment trusts |
| General shares, etc. (ippan kabushiki-tō) | Shares and similar instruments other than listed shares, etc. |
For example, Mr. Lin’s listed shares and his publicly offered fund (not a specified stock investment trust) both count as listed shares, etc. If he also held shares that do not qualify as listed shares, etc., that portion would be calculated separately as general shares, etc.
How Are Sale Proceeds and Cost Basis Calculated?
Your gain is what you sold the shares for, minus your cost and fees.
Formally: total sale proceeds minus acquisition cost (shutokuhi) and brokerage fees and other necessary expenses. Acquisition cost is what you originally paid to buy the shares, including:
- the purchase price
- purchase fees
- related consumption tax
- fees such as the name-change fee at the time of acquisition
Two common situations need special attention:
- Buying in installments, then selling only part of the holding: if you bought the same stock in two or more installments and later sell only part of it, the cost per unit is worked out using a method based on the total average method (jun-sōheikinhō). This method averages the cost of multiple purchases into a single per-unit price.
- Not knowing the cost: if the acquisition cost cannot be determined, for example because the shares were inherited or bought too long ago to trace, you may use 5% of the sale proceeds for that stock as the acquisition cost.
For example, Mr. Lin bought the same stock in two separate purchases and later sold only part of it, so he would need to use the total-average-based method to work out his cost. If the cost of the shares he inherited from his father cannot be determined, he can use 5% of the sale proceeds as the acquisition cost.
What Is the Tax Rate, and How Does the Surtax Change in 2026 and 2027?
The rate is 15% income tax plus 5% resident tax (jūminzei), for a combined 20%, plus an additional surtax on top.
This rate applies to sale gains on both listed shares, etc. and general shares, etc. The surtax is calculated on the base income tax amount, and it differs between fiscal 2026 and fiscal 2027 onward:
| Fiscal Year | Surtax (on Base Income Tax Amount) |
|---|---|
| FY2026 | Special reconstruction income tax (fukkō tokubetsu shotokuzei), 2.1% |
| FY2027 onward | Special reconstruction income tax, 1.1%, plus special defense income tax (bōei tokubetsu shotokuzei), 1%, filed and paid together with income tax |
From fiscal 2027 onward, the combined surtax is still 2.1% of the base income tax amount, but 1 percentage point of that is the special defense income tax, so the full 2.1% can no longer be called the special reconstruction income tax alone.
To be clear: the 20% figure is only the income tax plus resident tax. The surtax is calculated separately, on top of that.
If You Have a Specified Account, Do You Still Need to File?
Not necessarily. If you elected to have your brokerage withhold tax in advance, you can choose not to file for sale gains on listed shares, etc. held in that account.
Two account terms first:
- Specified account (tokutei kōza): an account that a resident (or similar) opens with a financial instruments business operator, such as a brokerage. The operator calculates the sale gains on listed shares, etc. held in the account on your behalf.
- Withholding specified account (gensen chōshū kōza): a specified account for which you elected withholding at source. Withholding at source means the operator withholds the tax for you in advance.
Whether you need to file depends on your situation:
| Your Situation | What to Do |
|---|---|
| Ordinary specified account | You may file a simplified return using the specified account’s annual transaction report |
| Withholding account | You may choose not to file |
| Withholding account, but you want to offset gains and losses against another account, or use the special rules for offsetting and carrying forward losses on listed shares, etc. | You must file a final tax return (kakutei shinkoku) |
A final tax return means submitting your own annual return directly to Japan’s tax authority.
To elect withholding at source, you must submit the election form before your first sale of the year. Once elected, you cannot switch to no withholding partway through the year.
For example, if Mr. Lin wants his brokerage to withhold tax in advance, he needs to decide by the time of his first stock sale of the year at the latest.
Can a Loss From Selling Stocks Be Offset or Carried Forward?
Yes, but only if you file a final tax return.
A loss from selling listed shares, etc. through a financial instruments business operator can be used in these ways:
- Offset in the same year: against that year’s interest income on listed shares, etc., and against dividend income for which you elected separate taxation by filing.
- Carried forward: any loss not fully offset in that year can be carried forward to offset sale gains and dividend income on listed shares, etc. for the following three years.
To keep carrying a loss forward, there is one key condition:
- Starting from the year the loss occurred, you must file a final tax return with the required attached schedule every single year, without a gap.
- Even in a year when you sell no listed shares, etc. at all, you still need to file, or you lose the right to keep carrying the loss forward.
There are also limits on how this works:
- This loss cannot be offset against sale gains on general shares, etc.
- Losses from over-the-counter-style counterparty transactions and losses inside an NISA account do not qualify for this offset.
For example, if Mr. Lin sells listed shares at a loss one year and sells nothing at all the following year, he still needs to file a final tax return in that second year if he wants to keep carrying the loss forward.
As a next step, you can start by confirming three things:
- Do you hold listed shares, etc., or general shares, etc.?
- Is your cost basis information complete?
- Has your brokerage account elected withholding at source?
If you plan to offset or carry forward losses against another account, remember to file your final tax return on time. Carrying a loss forward requires filing every single year, with no gap.
Every investor’s portfolio and account setup is different, so filing responsibility can vary from person to person.
Frequently Asked Questions
Do I always have to file my own return when I sell stocks?
Not necessarily. In a withholding account, sale gains on listed shares, etc. can go unreported by choice. But if you want to offset or carry forward losses against another account, you must file a final tax return.
If I want to carry a loss forward, do I still need to file in a year when I sell nothing?
Yes. To keep carrying forward a sale loss on listed shares, etc., you must still file even in a year when you sell no listed shares, etc. at all.
I inherited shares and do not know the cost. How is the acquisition cost calculated?
When the acquisition cost cannot be determined, for example because the shares were inherited or bought too long ago to trace, you can use 5% of the sale proceeds for that stock as the acquisition cost.
Does this tax rate also apply to crypto-asset gains?
No. Crypto-asset gains are taxed and reported under a different set of rules; see Zagdim’s article on Japan crypto-asset tax (miscellaneous income, filing, and risk notes).
Glossary
- Listed shares, etc. (jōjō kabushiki-tō): a category of shares and similar instruments. Beneficial interests in publicly offered investment trusts count as this category, except for specified stock investment trusts.
- General shares, etc. (ippan kabushiki-tō): shares and similar instruments other than listed shares, etc.
- Self-assessed separate taxation (shinkoku bunri kazei): taxing sale gains separately from other income, calculated and filed on their own.
- Specified account (tokutei kōza): an account opened with a financial instruments business operator, which calculates the sale gains on listed shares, etc. held in the account.
- Withholding specified account (gensen chōshū kōza): a specified account that elected advance withholding, where sale gains on listed shares, etc. in the account can go unreported by choice.
About This Data
The facts in this article were checked as of October 21, 2026.
- The two-category split for stock and fund sale gains, the acquisition cost calculation, the tax rate, the specified account system, and loss offsetting and carryforward are drawn from the National Tax Agency’s No.1463, No.1464, No.1474, and No.1476.
- The fiscal 2027 surtax change is drawn from No.1522. That page explains the surtax amendment using futures transactions as its example; this article applies the same surtax structure to sale gains on stocks and similar instruments.
- Official documents explain each system on its own separate page. This article consolidates several of those rules into a single overview and is not the complete content of any single official document.
- This article does not cover the taxation of crypto assets; see Zagdim’s companion article on that topic.
- Mr. Lin’s scenario in this article is fictional and used only to illustrate how the rules apply.
When filing, confirm the rules that apply for that tax year against how you actually hold your assets.
Have a question about this guide? Leave a comment below, or ask Zagdim directly.
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Sources
- National Tax Agency — No.1463 Taxation on Transfer of Shares, etc. (Self-Assessed Separate Taxation)
- National Tax Agency — No.1464 Acquisition Cost of Shares, etc. Transferred
- National Tax Agency — No.1474 Offsetting and Carrying Forward Losses on Transfer of Listed Shares, etc.
- National Tax Agency — No.1476 Specified Account System
- National Tax Agency — No.1522 Special Taxation of Miscellaneous Income, etc. From Futures Transactions
Important Notice
This article is a general information summary and does not constitute tax or legal advice for any individual case. Facts were checked as of October 21, 2026. Regulations in Japan, and in your home jurisdiction, may be updated; refer to each jurisdiction’s current published guidance, and consult a qualified professional for individual cases.
