German-Japanese cross-border inheritance tax
Last updated: 29 Sep 2025
Japan × Germany: Inheritance & Gift Tax without a Treaty
There is no inheritance/gift tax treaty between Japan and Germany. Relief hinges on Germany’s §21 ErbStG (credit only for foreign-situs assets, calculated per country) and Japan’s unilateral rules. Japan’s 7-year look-back can pull certain lifetime gifts back into the estate.
- At a glance
- No treaty: what it means
- Germany §21 ErbStG: credit only for foreign situs (country-by-country)
- Japan’s 7-year look-back for gifts (transition period)
- Why gifting now can matter (time-sensitive)
- Temporary move to Austria: pros & pitfalls (non-German nationals)
- Worked example: Tri-state (no-tax country)
- FAQ
- Talk to us & downloads
At a glance
No treaty
- No bilateral allocation of taxing rights between JP and DE.
- German relief only via §21 ErbStG (object- and country-specific credit).
- Japan grants credits under domestic law (caps/conditions apply).
Typical risks
- Tri-state: assets in a country with no inheritance/gift tax → JP and DE can both tax.
- No “global credit”: credits are by situs country only.
- 7-year look-back in Japan (phased-in) may re-include gifts depending on timing.
No treaty: what it means
- No agreed situs rules between JP and DE.
- No bilateral obligation to fully eliminate double taxation.
- Relief relies on unilateral credits (Germany §21; Japan’s domestic rules).
Germany §21 ErbStG: credit only for foreign-situs assets, calculated per country
Germany credits foreign inheritance/gift tax only to the extent it is levied on foreign-situs assets. If foreign-situs assets are located in multiple countries, the credit is calculated separately for each country. Foreign tax paid in Country A cannot be credited against German tax attributable to assets in Country B or Germany.
| Asset location (situs) | Who taxes? | German credit? |
|---|---|---|
| Germany | Germany | No (no credit for foreign tax against German-situs assets) |
| Foreign country with inheritance/gift tax | Foreign country + possibly Germany | Yes—limited to German tax on that country’s assets |
| Foreign country with no inheritance/gift tax | Germany (and possibly Japan) | No (nothing to credit) |
Credits are documentation-heavy and capped by the German tax attributable to the same object.
Japan’s 7-year look-back for gifts (transition period)
Japan can add certain lifetime gifts back to the taxable estate if made within a look-back of up to 7 years prior to death. The longer window is being phased in and is slated to apply fully for deaths from 2031 under current law. Gifts outside the applicable window are generally not re-included.
Why gifting now can matter (time-sensitive)
Action checklist (no advice)
- Map assets & situs (which country, which class; any local gift/transfer taxes?).
- Sequence gifts against Germany’s 10-year aggregation and Japan’s 7-year look-back.
- Avoid control/reservation traps (revocation/benefit retention can trigger anti-avoidance).
- Evidence & valuation: contemporaneous valuation in EUR for Germany; transfer proofs for credit claims later.
Temporary move to Austria: pros & pitfalls (non-German nationals)
Assumption for this section: the donee is a Japanese national who had been living in Germany, then becomes genuinely non-resident in Germany while staying in Austria (which levies no inheritance/gift tax). If the gift is received during that Austrian period, it can fall outside German taxing rights—provided there is no other German nexus (e.g., German-situs assets).
Austria has notification rules; real estate transfers trigger Austrian real estate transfer tax. Moving back to Germany later does not retro-tax a past foreign gift; German aggregation only counts gifts that were taxable in Germany.
Worked example: Tri-state (no-tax country)
Assets sit in Country C (no inheritance/gift tax). Heir in Germany; decedent within Japan’s worldwide scope. Result: Japan + Germany can both tax the same assets; Germany has no §21 credit anchor because Country C levies no tax. Planning focuses on gifting/timing and, where appropriate, creating a situs-based credit anchor.
FAQ
Does Germany credit Japanese tax on German-situs assets?
No. §21 ErbStG credits foreign tax only for foreign-situs assets and on a country-by-country basis.
Can Japan and Germany both tax assets in a third country?
Yes—if that country has no inheritance/gift tax, there is no German credit anchor; Japan may still tax worldwide depending on facts.
Do lifetime gifts avoid Japanese tax entirely?
Not automatically. The 7-year look-back (phased-in) matters. Acting now can help ensure a gift is outside the window by the time of death, provided anti-avoidance is respected.
Is moving to Austria a solution for a Japanese national?
It can help if the donee is genuinely non-resident in Germany at the gift date and has no German nexus. The German 5-year extended unlimited tax rule applies only to German citizens; it does not apply to non-German nationals.
Is there any JP–DE treaty relief?
No. There is no Japan–Germany inheritance/gift tax treaty. Relief is unilateral (Germany §21; Japan domestic credits).
Talk to us & downloads
We can map JP/DE/third-country exposure and design a practical sequence for gifts vs. estate.
