First time poster, long time reader, still a noob:
I’m currently living in Japan and am going to be transitioning off of a language school visa onto a business manager visa. I have a business I started in California back in 2019 that is a software development company. It’s a single member LLC and I’m the only employee.
My plan, when I first started down this path, was to create a business here in Japan that is not in any way related to the California business and would offer services different than the one in California does. I had initially hoped this would keep my Japanese and US tax liabilities separate but I’ve since learned it would not.
Since I live in Japan and am conducting business it’s my understanding that my California company will owe taxes in Japan. I will owe taxes for income distributed to me as pay and corporate taxes even though none of that money enters Japan via bank transfers or other means.
My assumption is that any distributions from the LLC to me as income is taxed the same way normal income is in Japan and I’ll be responsible to contribute to social programs (i.e. pension/healthcare) so my question is how the calculations are handled for the taxable liabilities for the business itself.
1. Does the company need to register for and collect VAT if the clients it serves are in the United States exclusively?
2. Is it only net profit that is taxable for corporate taxes (i.e. any claimed eligible expenses under US tax codes would reduce the tax liability)
3. Would contributions made by the company to a self-directed 401k (which is a trust) on behalf of the employee (me) be taxable?
4. Lastly, in the US dividends from investments that are received in retirement accounts (e.g. ROTH account receives REIT investment quarterly dividend) and not distributed prior to an eligible retirement age are not taxable. Are such investment returns taxable in Japan despite not being taxed in the US?
by HatOnAFox