Can Overseas FX Losses Be Carried Forward? Differences From Domestic FX in Japan
When you take a loss on overseas FX, are you wondering whether you can offset it against next year's profit?
As an explanation for residents of Japan, the National Tax Agency of Japan says that losses on over-the-counter FX with a domestic financial instruments business operator can be carried forward for the following 3 years. Trading with overseas brokers is generally not treated the same way, but we cannot say definitively for an individual case.
This article summarizes how it differs from domestic FX and what you can do to organize things within the same year.
In short: overseas FX losses are generally outside the 3-year carryforward
- The 3-year carryforward is a special rule for miscellaneous income from futures trading (National Tax Agency of Japan, No. 1523)
- The National Tax Agency of Japan excludes over-the-counter trading with parties other than Type I financial instruments business operators from separate self-assessment taxation (No. 1521)
- Overseas FX losses are basically organized within miscellaneous income, in the same year
- Confirm how your own trading is classified with a tax accountant or the tax office
How domestic FX and overseas FX are taxed differently
| Item | Domestic FX (OTC FX with a registered operator) | Overseas FX (brokers other than the above) |
|---|---|---|
| Tax method | Separate self-assessment taxation | Generally miscellaneous income under comprehensive taxation |
| Tax rate | Income tax 15% + local tax 5% (special reconstruction income tax is separate) | Added to other income, progressive rates (5 to 45%) |
| Loss carryforward | The following 3 years (requirements apply) | Generally treated as outside the special rule |
| Offsetting losses | Within miscellaneous income from futures trading | Within miscellaneous income. Cannot be offset against other income |
How offsetting within miscellaneous income works
The National Tax Agency of Japan explains that losses arising in calculating miscellaneous income cannot be offset against other income. In general, you cannot offset them against salary income to reduce your tax.
Within miscellaneous income itself, however, profits and losses are added together. If you have several overseas accounts, the profit and loss for the same year is generally considered in total.
| Account | Annual profit/loss (before expenses) |
|---|---|
| Account A | +¥1,000,000 |
| Account B | -¥600,000 |
| Miscellaneous income profit/loss (total) | +¥400,000 |
What you can do to organize things within the same year
- Total your necessary expenses without omissions (items are covered in the expenses article)
- Record the profit and loss and deposits and withdrawals of multiple accounts as one annual total
- Manage cashback credited amounts separately, and confirm the classification with a specialist
- If you use both domestic and overseas FX, keep records in separate categories
What to watch for in a year with losses
- Keep your annual trading history and deposit and withdrawal records even in a loss year
- If you use the 3-year carryforward for domestic FX, you need to file a tax return even in the loss year (per the National Tax Agency of Japan)
- Whether you need to file a resident tax return is something to confirm with your city or ward office
- Rules can be revised, so check the National Tax Agency of Japan's latest pages every year
How to prepare when consulting a tax accountant
- 1
Summarize your broker and account information
List the broker name, applicable entity and account type.
- 2
Prepare annual profit/loss and deposits and withdrawals
Save your MT4/MT5 history and your deposit and withdrawal records.
- 3
Attach your cashback records
Organize screens showing the crediting dates and amounts.
Check candidate necessary expenses you can organize within the same year, and how to keep supporting documents.
See how to think about expensesFAQ
Q.Can overseas FX losses be carried forward to the next year?
The 3-year carryforward deduction described by the National Tax Agency of Japan is a special rule for miscellaneous income from futures trading. Trading with overseas brokers is generally treated as outside it, but check individual cases with a tax accountant or the tax office.
Q.Can overseas FX losses be offset against salary income?
The National Tax Agency of Japan explains that losses from miscellaneous income cannot be offset against other income. In general, you cannot offset them against salary to reduce your tax.
Q.Can I combine profit and loss from domestic and overseas FX?
Profit and loss under domestic separate self-assessment taxation cannot be offset against other income. Domestic and overseas FX are generally calculated as separate categories. Please confirm the treatment with a tax accountant.
Sources
- National Tax Agency of Japan, Tax Answer No. 1521: Taxation of Foreign Exchange Margin Trading (FX) (checked 2026-10-22)
- National Tax Agency of Japan, Tax Answer No. 1523: Carryforward Deduction of Losses on Futures Trading Settlements (checked 2026-10-22)
- National Tax Agency of Japan, Tax Answer No. 1500: Miscellaneous Income (checked 2026-10-22)
- National Tax Agency of Japan, Tax Answer No. 2260: Income Tax Rates (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.
