Technical article

Japan, Malaysia, the Philippines and Vietnam: What an Heir Pays

Two cousins in the same will can meet two different taxes, one on the estate and one on the heir.

By Neil Solomon · 4 min read

Picture a family where a grandmother in Canada has a trust, and four cousins are scattered across Asia. One lives in Tokyo, one in Kuala Lumpur, one in Manila and one in Ho Chi Minh City. The family asks a plain question: what does each cousin pay when money from the trust or an estate reaches them?

The sources give four different answers, shown at a glance below.

Japan. Inheritance tax runs from 10% to 55%, with the top rate above JPY 600 million. The recipient pays. The basic exemption is JPY 30 million plus JPY 6 million for each statutory heir. Gift tax is also paid by the recipient, with a yearly exemption of JPY 1.1 million and a top rate of 55%. PwC, tier B, says overseas assets are outside the tax where certain temporary foreign residents or non-Japanese persons are involved, while Japan-situated assets are always taxed.

For income, a person with more than five years in Japan in the last ten is taxed on worldwide income. A non-permanent resident is taxed on foreign income only if it is paid in or remitted to Japan. For a trust, Chambers 2026 (tier B) says a Japan-resident beneficiary of a transparent trust, foreign trusts included, is generally taxed on the trustee's income, and not if the trust is treated as a deemed corporation. Residents other than non-permanent residents file an overseas assets statement if their foreign assets exceed JPY 50 million (about US$330,000) at 31 December, due 15 March. That is the National Tax Agency's own guide, tier A.

Malaysia. PwC says there is no inheritance, estate or gift tax. Stamp duty on instruments is paid by the transferee. A person is resident with 182 days or more in a calendar year. Foreign income received by a resident individual is exempt from 2022, but the end date differs by source: PwC and The Star give 31 December 2036, and the tax board's June 2024 guideline still shows 2026. The guideline also asks that the income has been taxed in the country it came from, and it does not mention trusts.

The Philippines. The estate tax is 6% on the net estate and falls on the estate, not on the heir. A law-firm article from 2025 (tier C) adds that the estate of a non-resident non-citizen is taxed only on Philippine property. One commentary (tier U) puts donor's tax at 6%, with the first 250,000 Philippine pesos (about US$4,400) a year exempt. A single online commentary (tier U) says income payouts from an irrevocable trust are the beneficiary's income, up to 35%, and that payouts of the trust's capital are generally not income.

Vietnam. Inheritances and gifts are taxed as personal income at 10% on the value above 20 million dong, paid by the recipient. This comes from a Vietnam tax advisory firm's note (tier B) on the new personal income tax law in force from 1 July 2026, and the decree and circular that carry out the law are still to come. Residents are taxed on worldwide income with a 183-day test.

You might say: "Malaysia has no tax, so that settles it." On inheritance, that holds. Income is another matter, because the exemption for foreign income has an end date that two sources read differently, and a trust is not named in it. A cousin planning to live in Kuala Lumpur for many years may want to read the end date.

You could ask each cousin two things: the country they hold a home in, and whether their trust is transparent or a company in the eyes of that country.

The family reach is wide. Two cousins in the same will can meet two different taxes, one on the estate and one on the heir.

Which of these four countries is your family closest to, and what surprised you? Share it here. Another cousin may be asking the same.

Figures are estimates for planning, based on public data. Date read: October 2026.