Japan tax guidelines for secondary income and retirement benefits

In Japan, tax obligations for secondary income and retirement benefits depend on the distinction between gross sales and actual income, as well as the specific type of taxation applied.

Selling personal household items, such as used clothing or furniture, on platforms like Mercari is generally tax-exempt as these are considered 'living assets.' However, if items are purchased specifically for resale to generate profit, the resulting income may be classified as business or miscellaneous income. For salaried employees, a final tax return is typically required if miscellaneous income exceeds 200,000 yen per year.

Regarding retirement benefits, receiving a retirement payment generally does not affect a household's status as a resident tax-exempt household. This is because retirement income is subject to 'separate taxation' and is excluded from the 'total income amount' used to determine resident tax exemptions. While retirement income is included in the total income for national income tax purposes, tax reforms have clarified that it is excluded from the calculation for resident tax eligibility.