Hello everyone 🙂
My girlfriend and I are considering going to Japan/Korea for a year and I have two specific questions I’m wondering about:
1. We are both Americans and understand that we have an obligation to pay taxes in the US despite living out of the country. We intend to use the foreign earned income exclusion (up to 96k) by staying in Japan/Korea for a year. What I’m curious about is will we be obligated to pay tax in Japan (which I understand is 20%)? Even if so it’s still less than we’d pay to the US, but I want to clarify how much we’ll be saving by moving.
2. If we have a multi-entry visa for 1 year, is there a specific amount of time we need to exit before entering the country again? Secondly, how seriously would they look into whether we are actually in Japan for business purposes (so that neither us or our friend get into trouble)?
I appreciate any experiences you can share or directions to where we can find information.
1 comment
Well, the first question is what visa are you entering Japan with? there is no digital nomad visa, or remote work for American firm visa.
Beyond this, the tax you’re looking at is the Income Tax, you then have a “residents tax” on top of this, which is around 10% (this may or may not apply depending on when you move to Japan and how long you are there for). Also if self employed there is a Enterprise tax which can be up to 5%
You are if working in Japan required to pay taxes in Japan yes, the problem is, if you are employed by a US company, its up to them to pay taxes an abide by Japan’s employment laws as youre an employee. If youre a freelance contractor, then sure its on you. But again, the bigger question is what kind of visa you plan on getting.
If youre just going in on the standard tourist visa waiver, which point 2 makes it look like you plan on it, then working from Japan is illegal anyways, so you wouldnt be able to pay taxes as youre working there illegally. (also from a technical stance, if this is the case, since youre working illegally, you cant declare this as foreign sourced income so would be liable for US taxes on it, if you did declare it and get away with that, youve also then committed tax fraud in the US for false income declarations)