Selling Physical Gold in Japan: Income Tax on Capital Gains and the JPY 2 Million Payment Report

What is the JPY 2 million rule for selling gold?

If you own gold in Japan, you have probably heard of it at least once.

It is the rule that "a payment report must be filed if the amount exceeds JPY 2 million."

Under this rule, when the profit from selling gold exceeds JPY 2 million, the gold buyer (dealer) must submit a payment report (shiharai chosho) to the tax office.

When the payment report is submitted, details such as your name and address are reported to the tax office.

*Even if your profit from selling gold is JPY 2 million or less, you still need to file a tax return.

*Amounts and rules are as of July 2025. This article is an English version of our Japanese guide, adapted for foreign residents of Japan and international investors.

Selling gold is subject to income tax under aggregate taxation

As of July 2025, the retail price of physical gold in Japan is about JPY 17.4 million per kilogram.

Around December 2020, the retail price was about JPY 7 million per kilogram, so in retail terms the price has risen by more than JPY 10 million per kilogram. *About 2.42 times

*Note that the spot price of gold and the retail price are different, so you should not look at the retail price alone
→ because the gold you bought will not necessarily sell at the current retail price

Taking profits on gold bullion can trigger a large income tax bill

For example, suppose you bought 2 kg of physical gold for a total of JPY 14 million and are holding it.

If you were able to sell this 2 kg of physical gold for JPY 34 million, you would have capital gains (transfer income) of just under JPY 20 million.
*Strictly speaking, taxable income is calculated using the formulas below, so the full JPY 20 million is not taxable income.

Capital gains on gold are added together with your other income, such as business income and employment income.

Income tax is charged at 33% on the portion of annual taxable income above JPY 9 million. *Local inhabitant tax of 10% is also charged on top, for a total of 43%.

On the portion of annual taxable income above JPY 18 million, you are taxed at a combined 50%: 40% income tax plus 10% inhabitant tax.

Below are the formulas for calculating taxable income when gold is sold within 5 years of purchase (short-term capital gains) and after more than 5 years (long-term capital gains).

Short-term capital gains

Sale price of the gold or other assets − (purchase cost of the gold or other assets + selling expenses) − special deduction of JPY 500,000

Long-term capital gains

(Sale price − (purchase cost + selling expenses) − special deduction of JPY 500,000) ÷ 2

Income categories for gold sales

Depending on the purpose and other circumstances, income from selling gold may fall into one of the following categories:
- Capital gains (transfer income)
- Miscellaneous income
- Business income

No taxable income on gold or silver if the gain is under JPY 500,000?

Broadly speaking, yes, but note the following:

- Multiple sales within the same year are added together

- The JPY 500,000 special deduction applies only to individuals. Corporations are not eligible.

If gold bought as an inflation hedge gets taxed, it defeats the purpose

As shown above, income from selling gold can be taxed quite heavily, which shrinks the gains you made from the rise in the gold price.

So what should you do?

Since selling triggers tax and reduces your assets, one option is to keep holding the gold without selling it and consider a different approach.

This is a bit of a tangent, but with crypto assets such as Bitcoin, there are also ways to borrow money using your crypto assets as collateral.
In that case, you are not realizing a profit, so you are not hit with a large tax bill.