Hi,
I’m working full time for a company in Japan, so everything including my taxes and so on goes through them.
I recently on the side, ran a kickstarter for a comic book which turned out to be quite successful. It was done through my own name, and the money was directly deposited to my personal Japanese bank account (it’s not the same one I receive my salary – I set up a new account specifically for KS income). It was not done through a business. I’m not registered as self employed or fill any forms.
My question is, how do I pay taxes on this? Do I have to self report the income somehow? It was just over 1,000,000 yen in total.
Also, I have to pay some people I hired as contractors some of this money also, so after paying them, I’ll only actually be able to keep and receive part of that money. But because I am not a company will the entire amount get classed as income and be taxable, or only the part (my share) after I have paid to the contractors?
How do I prove to the tax office it wasn’t all income and that I also had expenses for this?
For example, for the Kickstarter project i had to hire a logo artist, web designer, 2d artists and some other roles which all came out of my personal bank account before the KS was launched. Some of those artists had an agreement to receive % of the KS also. I also have to pay for printing and delivery fees on the actual comics.
So my fear is I have to pay tax on the 1,000,000 yen as that’s what entered my bank account, but actually I’ll only eventually receive (in profit) around 300,000 of that after paying the contractors (and other fees like printing etc), but because it’s not through a company or I don’t have a way to do ‘expenses’ I can’t prove this.
If the 1,000,000 simply gets added onto my ‘income’ for the year, then it seems my additional taxes according to a calculator could be an extra 165000円 (or actually probably more than that, as it will push my total income into a higher tax bracket), so I would only be actually left with 135,000 (or less) from the 1,000,000. Which is a big difference on it seems like roughly 18000円 if calculating my actual share from the income.
So which do I pay tax on, the 1,000,000 or the 300,000 profit?
I hope that makes sense. Am I over-complicating it?
After reading some other threads on here it seems it’ll depend also on total amount for the year. I will most likely do a few of these a year, so the total income will most likely exceed any yearly minimums for side income.
by Illogical_Breakfast