Hi,
I know this is a common question and I have read the wiki several times but still a bit unsure about a few things.
I plan to come to Japan March of 2025 with WHV and mainly finance myself by doing freelance independent security research remotely. I would not have any employer, it would essentially be foreign-source remote income. The source of my income would NOT be the country I come from whose national I am.
My work can have quite high income (2 million yen per month) so I want to make sure I am paying taxes correctly but also not end up paying more than I am legally obliged too.
My understanding is that as a NON-RESIDENT taxpayer I would only be paying a flat rate of 20.42% national income tax and no local income tax which for a high income seems too good to be true. (I currently pay 50+% tax)
But what seems confusing is it also seems like foreign sourced income is not taxable for non-resident taxpayers which seems odd. As I would be staying for a year, I would not be taxed in the country I am coming from either, and I would very much liked to be taxed in Japan rather than my home country anyway since there is a big difference in amount of tax I would pay. I am wondering how this interaction of having income that is technically not taxable in either countries would work like.
Furthermore I am wondering what happens if I like Japan and say decide to open a company here for a business visa (no need to explain how much of a hassle that would be, I have already looked into it and I know it is not easy. I am just interested in taxation aspect).
Say that my stay in Japan was originally from March 2025 to March 2026 and sometime in 2026 before leaving or after I apply and am granted a business manager visa so I would be staying longer than a year in total and become non-permanent resident taxpayer and liable to local tax as well.
Would my income local tax then (10%) which I would pay if I am back on business visa (2026) depend on my income from 2025 since it is levied on a resident’s tax of the prior year, even if I was still a non-resident taxpayer on January of 2026?
Furthermore during my stay as a working holiday visa holder, would I need to register a sole proprietorship? Would it have any tax benefits such as being able to deduct costs like office space, computer etc as opposed to doing it without? Am I even allowed to do any deductions as a non-resident taxpayer?
Sorry, I know it is a lot of questions, and some of which I know have been answered before but I am too dumb to understand.
Thanks in advance.
by Due_Conclusion_9886