Overseas FX Expenses List: What Can Count as Necessary Expenses (Japan Residents)
When you make a profit from overseas FX, are you unsure whether internet fees or the cost of a PC can count as expenses?
As an explanation for residents of Japan, the National Tax Agency of Japan defines necessary expenses as costs required to earn income. Spending that is partly personal is limited to the portion that can be clearly separated as necessary for the business.
This article summarizes items that tend to be expense candidates, and how to think about apportionment and receipts. We cannot say definitively what is allowed in an individual case, so confirm the final judgment with a tax accountant or the tax office.
In short: expenses are what you can separate as necessary for earning income
- The basic idea of necessary expenses is costs required to earn income (National Tax Agency of Japan, No. 2210)
- For costs mixed with personal use, only the part you can clearly separate as business use is eligible
- Internet, VPS and books can be candidates, but whether they qualify depends on individual circumstances
- Keep receipts, statements and the basis for any apportionment, and confirm the final judgment with a tax accountant or the tax office
The general idea of necessary expenses (as explained by the National Tax Agency)
The National Tax Agency of Japan explains that for household-related costs, only the amount that can be clearly separated as necessary for the business becomes a necessary expense.
If your overseas FX profits fall under miscellaneous income, necessary expenses are calculated by deducting them from revenue. The classification itself can change depending on the form of your trading.
- Is the spending linked to the purpose of earning income?
- Can you separate the personal portion from the business portion?
- Do you keep documents showing the fact and nature of the payment?
Items that tend to be expense candidates in overseas FX
| Item | How to think about it (candidate) | Notes |
|---|---|---|
| Communication costs (internet, phone) | Apportion by the share used for trading | Exclude personal use. Record the basis for the ratio |
| VPS fees | If used for trading, such as running EAs | Keep the contract, invoices and the purpose |
| EA and indicator purchases | If used for trading | Keep purchase records and evidence of actual use |
| Books, information sites, seminars | If spent to learn about trading | Be able to explain the link between the content and your trading |
| Equipment such as PCs and monitors | If not used only for trading, apportion by usage share | Check with a tax accountant on how high-priced items are treated |
| Trading and withdrawal fees | Costs directly incurred by trading | Keep statements. Spreads are included in trading profit and loss |
Examples that are unlikely to be accepted as expenses
- Costs that cannot be separated from personal use, such as the full amount of living costs, food or rent
- Travel or entertainment costs unrelated to trading
- Trading losses themselves (these are calculated separately as trading profit and loss)
- Costs with no documents showing the fact or purpose of the payment
- Spending in another person's name whose link to your own income you cannot explain
How to apportion and how to keep supporting documents
- 1
Separate the purpose
First decide whether an item is for trading only or mixed with personal use.
- 2
Set an apportionment standard
Choose a standard that is easy to explain, such as hours or days of use.
- 3
Note the basis for the ratio
Record the date and reason for your calculation, in the same format every year.
- 4
Keep supporting documents
Organize receipts, invoices and card statements by year.
Cautions on calculating income when you receive cashback
We cannot say definitively whether cashback should be included in trading profit and loss or treated as separate income. How expenses are deducted may also change depending on the classification.
- Track the date and amount credited to your trading account in a separate column
- Total trading profit and loss, cashback and expenses on the same calendar-year basis
- If you are unsure about the classification, consult a tax accountant with your records in hand
How to prepare when consulting a tax accountant
- 1
Prepare your annual trading history
Save your MT4/MT5 history from January 1 to December 31.
- 2
Make a list of costs
Put the item, amount, payment date and apportionment ratio in a table.
- 3
Bring your supporting documents
Keep receipts and invoices organized, even as images.
Check estimated income tax and resident tax on a profit in a quick-reference table.
See the tax quick table by profitFAQ
Q.What can count as expenses in overseas FX?
Candidates include internet fees, VPS fees, books, seminars and trading fees. However, for costs mixed with personal use, only the part you can separate as business use qualifies, and it depends on individual circumstances. Check with a tax accountant or the tax office.
Q.Are overseas FX losses an expense?
In general, trading profit and loss is calculated as income and expenditure separately from expenses. Check with a tax accountant or the tax office which category your own trading falls under.
Q.Can I apportion my home PC and internet bill?
The National Tax Agency of Japan explains that for household-related costs, only the amount that can be clearly separated as necessary for the business becomes a necessary expense. Recording the basis for your usage ratio makes it easier to explain.
Sources
- National Tax Agency of Japan, Tax Answer No. 2210: Necessary Expenses (checked 2026-10-22)
- National Tax Agency of Japan, Tax Answer No. 1500: Miscellaneous Income (checked 2026-10-22)
- National Tax Agency of Japan, Bookkeeping and Record Retention for Individuals Running a Business (checked 2026-10-22)
This article is for information purposes only and is not investment advice. Conditions may change, so please check each broker's official page for the latest information. Offshore FX and CFD trading carries a risk of losses exceeding your principal.
