The Unclear Definition of Permanent Resident

We all know a “permanent resident” to be someone who has the right to remain in a country for an indefinite period of time having similar rights to those of citizens of said country. In Singapore, it’s the same; and in Japan, too.

At least, I thought it was.

It appears that there are two different definitions of a “permanent resident,” one of which refers to someone who doesn’t have a permanent resident visa in Japan.

WTF right?

When it comes to visa matters, having to renew your visa means you do not have permanent residency in the country. In Japan, once you get your permanent residence status, you only have to renew your resident card once every 7 years. That is just an update to your photograph and residency status I would assume, but not your eligibility to remain in the country. However, when it comes to tax matters, it appears that I may be considered a permanent resident.

According to the tax office, there are two main types of residents in Japan:
1) Non-permanent resident
2) Permanent resident (*this does not necessarily refer to someone with a permanent residence visa)

This difference plays a huge role in the scope of your income that has to be taxed. The definition of a non-permanent resident is someone who has or had a residential address in Japan for up to 5 years over the last 10 years. For non-permanent residents, all income from sources in Japan has to be taxed and income from sources outside Japan will not be taxed unless they are paid in, or remitted, to Japan. For permanent residents, which is defined as anyone with an address in Japan for more than 5 years in the last 10 years, all income will be taxed regardless of whether they are paid in Japan or not; remitted to Japan or not. For easier understanding, refer to the screenshot of an application form from the National Tax Agency below.

I’m still a little confused by the details, to be honest, and I recently submitted the form to the tax office identifying myself as a non-permanent resident (because I am not a permanent resident!). But the form did require me to detail the period I’ve been in Japan in the last 10 years, so if I am supposed to be labeled as a “permanent resident” bracket, they will probably let me know. We’ll see.

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