Second post here, after I got some very useful replies in a previous related post.
I am PR. My spouse is Portuguese, working for a Portuguese company and paid in Euros, in Portugal. She is scheduled to move to Japan in a few months, and keep working for the same company from here.
We had a preliminary discussion with a Japanese accountant, and he gave us some information that I cannot fully trust. I think that there are caveats which were not pointed out, and since I have seen similar questions asked often here, I would like to tap into the community knowledge. My understanding is that there are three general scenarios:
A) Her company contracts a local japanese ‘hiring company’ who will act as her nominal employer. She will sign a contract with the Japanese intermediate company, whose main obligation would be to give her a salary (paid by the portuguese company to the japanese one) and taking care of tax filing and social insurance etc. This way, she is paid in JPY, and she pays taxes etc. in Japan.
B) She becomes an independent contractor in Japan, and gets paid on a project basis directly by the Portuguese company. She has to manage her taxes and social insurance by herself, probably hire an accountant etc. I think this option will have her open a ‘single person company’ for herself, through which she will charge for services. This way, she is paid in EUR, and she pays taxes etc. in Japan.
C) Since for the first 5 years she can avoid being taxed on global income, she changes nothing. She gets paid in Portugal, in Euross. This way, she is paid in EUR, and she pays taxes in and social insurance in Portugal, at least for the first 5 years.
I was surprised that the accountant actually recommend that we go with (C). By reading several posts I think there are tax implications every time she spends any of her income in Japan, and we may end up getting in trouble or having to pay double tax. Is the last option really a viable one? Do people do it? And if yes, what are the caveats?
1) Claim that you only spend savings (and not income) to not be taxed again in Japan?
2) Properly declare all the income in Portugal, and since Japan and Portugal have a double taxation avoidance treaty, calculate the difference in taxes and only pay extra tax in Japan in case it would have been higher?
3) In either case, what about social insurance? I imagine she could be covered under my insurance (spouse of PR visa) but it somehow seems wrong that someone with a proper income is not contributing to their own health insurance?
Apologies for the rambling post, I just need to understand if anyone has actually made option (C) work and what the implications were. I repeat that we are not Americans, since I understand that this would mean even more complications.
Many thanks in advance
by opalakia