Your US-vested RSU isn't taxed by Japan if you don't remit it. Until year 6. Then everything changes.

Japan's non-permanent resident (NPR) status applies to foreign-national residents who have had a domicile or residence in Japan for an aggregate of no more than 5 years within the last 10. While NPR, you're taxed on Japan-source income (always) plus foreign-source income that is paid in or remitted to Japan. Foreign-source income that stays outside Japan is not taxed.

The critical distinction for cross-border RSUs: the portion of an RSU vest attributable to days you actually worked in Japan during the vesting period is Japan-source income. Japan taxes it regardless of remittance, regardless of where the brokerage account is, regardless of whether the proceeds ever touch Japanese soil. The NPR remittance shield does not apply to that slice.

What the NPR shield does cover: the portion of the RSU vest attributable to non-Japan workdays during the vesting period. So an Indian engineer who joined a US employer's Tokyo office mid-way through their 4-year vesting cliff has two slices to deal with — a Japan-workday slice (taxable in Japan even if proceeds sit in a US brokerage and never enter Japan), and a non-Japan-workday slice (foreign-source, shielded by NPR if not remitted).

For the cleanest NPR-era tax position: minimise vesting-period overlap with Japan workdays where possible (start dates, leave timings, sabbaticals all matter), and segregate the foreign brokerage proceeds so the non-Japan-workday slice stays cleanly outside Japan for the full NPR window.

The remittance trigger in Japanese tax law is broader than 'I sent a wire to my Japanese bank'. Direct remittances obviously qualify: a transfer from your Schwab account to your Mizuho account is unambiguously a remittance, and the foreign-source income that funded it becomes Japanese-taxable on a pro-rata basis.

Indirect remittances are where most people get caught. Using a US-issued credit card in Japan to pay for groceries, where the card is funded from US salary or RSU proceeds, is treated as a deemed remittance by the National Tax Agency (NTA). The same applies if your Japanese rent is paid through an international transfer arrangement funded from US accounts. The NTA applies a remittance-tracing methodology that allocates foreign income proportionally to any remittance, direct or indirect.

The cleanest discipline: cover all your Japanese living expenses from your Japanese salary, paid into a Japanese bank account, used only on Japanese-issued cards or Japanese-tied digital wallets. Keep US-sourced RSU proceeds in US accounts, untouched in Japan, throughout the NPR period. The cleaner the segregation, the cleaner the remittance position.

While Japan can be neutralised on RSU income through the NPR + non-remittance combo, India can still have a claim. If you worked in India before moving to Tokyo, and a portion of your RSU's vesting period covers your India service days, India sources that portion as Indian-employment income — regardless of where the vest happens or where the proceeds sit.

This is the days-of-service split we cover in detail in our cross-border RSU article. An Indian engineer who worked in Bengaluru for 2 years before moving to Tokyo for 4-year-cliff RSUs that vest in Tokyo would still owe India tax on roughly 50% of those vests (the portion earned during the India years). The India-Japan DTAA Article 15 (Dependent Personal Services) governs the split.

What changes for someone who joined the Japanese employer directly out of campus or from another non-Indian country: the India service-day count is zero, India's source claim is zero, and the full vest is sourced to Japan (which then ducks under the NPR + non-remittance shield). This is why the cleanest Tokyo NRI tax position is for engineers who moved to Japan without prior Indian employment days.

Once you cross 5 years of Japanese residence in any 10-year window, you become a 'permanent resident' for Japanese tax purposes. Japan now taxes your worldwide income at progressive rates that reach 45% national + 10% local on the top bracket. RSU vests, Indian dividends, Indian property rental, NRO interest — everything becomes Japan-taxable.

The Japan-side tax in year 6 is structurally higher than the source-state rates you've been paying. India taxes NRO interest at 30% domestic / 10% treaty; Japan in year 6 taxes the same interest at your marginal rate, often 33-45%. The India-Japan DTAA Article 23 gives Japan credit for Indian tax paid, but only up to the Japanese tax on the same income — the excess Japanese tax is real out-of-pocket cost.

The planning lever for the year-6 transition: time large equity events to land inside the NPR window, not after. If you have 1,000 RSUs scheduled to vest in years 4, 5, and 6, consider whether the year-6 tranche can be accelerated to year 5 through employer-agreed arrangements (uncommon but exists), or whether selling vested-but-unsold shares from earlier years before year 6 makes more sense.

The alternative lever: leave Japan before year 6 begins. Returning to India, moving to Singapore, or moving to a third country resets the NPR clock (you have to spend less than 5 years in Japan in any rolling 10-year window). For Indian engineers on 4-5 year typical Tokyo postings, this is the implicit reason most don't extend past the cliff.

Even while NPR shields you from most Japan-side tax, the India-side compliance has to run continuously. Form 10F + TRC keep your NRO interest at the 10% treaty rate. Annual ITR-2 filing keeps you off the (now-defunct but still procedurally referenced) specified-person flag and unlocks DTAA refunds where any bank over-deducted.

For RSU income split between India and Japan, the India-source portion gets disclosed in ITR-2 as salary income for the relevant FY. Form 67 may apply if Japan also taxed that portion (which it shouldn't during NPR if not remitted — but document the non-remittance position carefully).

Schedule FA disclosure of foreign assets — your US brokerage holdings, your Japanese savings — applies once you're a resident-and-ordinarily-resident in India. During NPR-equivalent Indian RNOR (which most Tokyo NRIs are in their early India years), Schedule FA may be lighter — but the protective filing keeps you visible to the department in case of future audit.

The TRC requirement: Japan issues TRCs (Form 1 or equivalent) through the NTA. Application is straightforward; the issuance time is 4-6 weeks. Renew annually before the Japanese tax year ends (Japan's tax year is calendar year, January-December — coordinate with the Indian FY April-March cycle).

Year 1 in Tokyo: Set up segregated finance. Japanese bank for salary, Japanese-issued card for living expenses, US brokerage left untouched for RSU vests. Document the non-remittance discipline.

Year 2-3: Track RSU vests as they happen. Compute the India service-day split for each tranche. File Indian ITR-2 with the India-source portion. File Form 67 if any Japanese tax was levied on the India-source slice (shouldn't be during NPR + non-remittance).

Year 4: Begin the year-6 transition planning. Inventory RSUs scheduled to vest in years 5 and 6. Consider acceleration, sale, or country-shift to preserve the NPR shield. Engage a Japanese tax advisor for an extended-stay tax projection.

Year 5: Final NPR year. If you're staying in Japan past year 6, prepare for the worldwide-income switch — sell appreciated foreign assets before year-end to lock in the lower (no-Japan-tax) base. If you're leaving Japan, time the departure to capture full NPR for the calendar year.

Year 6+: Worldwide income taxation begins. Full Japanese tax on all income. Coordinate with India-side filings using Article 23 FTC mechanics. This is the year when poor early-stage planning becomes expensive — every shortcut in years 1-5 (mixed account discipline, undocumented non-remittance, no India-side filings) shows up as tax exposure in year 6.