A non‑resident generally does not need to file a Japanese tax return if all Japan‑source income is fully taxed through withholding. However, income or gains connected to Japanese real property are treated differently.
This includes not only land and buildings in Japan but also shares of a corporation—Japanese or foreign—whose value is primarily derived from Japanese real property (directly or indirectly). Such corporation is called 不動産関連法人 Real Property Related Corporation (RPRC). Gains from selling such shares are treated as Japan‑source income, and the tax must be settled by filing a Japanese tax return. Under most tax treaties, the taxing authority is retained by the source country, i.e., where such real property is located.
