Taxes & Visa when working for a foreign company

4 comments

1. This is a copy of your post for archive/search purposes.

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   **Taxes & Visa when working for a foreign company**

   Hi,

   I am French currently living in Singapore and I have my partner living in Japan (not married, and not on the table yet). I wish to come live to Japan but have been especially put off by the taxes which I see go up to 35% in my case (equivalent of 11.5M yearly), split inside Pension + Insurance, Income Tax, and Resident Tax.

   As a foreigner, would there be a way for me reduce the taxes which are very high compared to what I currently pay in Singapore (about 6%). I read that apparently it’s possible to get exempted of taxes from foreign incomes, which would be the case as I’d still be working for my Singaporean company which doesn’t have offices in Japan.

   One issue would be the visa, and the other one being the taxes, and both might be linked. Would you guys have any hint as to where I could look in order to be able to come to Japan without bleeding out cash on taxes and pension.

   Thank you for your help.

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2. >I read that apparently it’s possible to get exempted of taxes from foreign incomes

   Not the way you’re thinking.

   “Foreign-sourced income” is ***very*** narrowly defined in Japanese tax law. It refers to things like rental income, stock dividends, and other passive income. It is also only exempt if the money never enters Japan. If you remit *any* of it to Japan, ***all*** of it becomes taxable.

   >I’d still be working for my Singaporean company which doesn’t have offices in Japan.

   On which visa are you planning to do this?

   Spoiler alert: There isn’t one. There’s no “remote worker” or “digital nomad” visa in Japan.

   Unless you marry your partner there’s no easy way to do this.

   Your tax questions are secondary to the visa question, as the tax question is irrelevant unless you get a visa.

3. > I read that apparently it’s possible to get exempted of taxes from foreign incomes, which would be the case as I’d still be working for my Singaporean company which doesn’t have offices in Japan.

   The Income Tax Act would define income from work you’re doing while present in Japan to be domestically sourced income. Which means you’d owe Japan taxes on it. You’d want to review the Japan-Singapore tax treaty to figure out what your tax obligations would be in Singapore, but the existence of the treaty is a good indicator that you won’t be subjected to double taxation.

   You would of course need to ensure your company is on board with such a scheme. As a Japan based employee you would be protected by Japanese legislation and your employer would have certain obligations. Usually in such circumstances you would move into a contractor/freelance type role and no longer be directly employed. There are firms that help facilitate such arrangements.

   >One issue would be the visa

   Indeed it would, as you require a domestic sponsor, usually either an employer or a spouse. You’ve got neither.

   >come to Japan without bleeding out cash on taxes and pension.

   While you cannot escape your tax obligations, if/when you decide to leave Japan you can claim a lump-sum withdrawal of your pension. Details here: https://www.nenkin.go.jp/international/japanese-system/withdrawalpayment/payment.html

4. Singapore has some of the lowest income taxes out there, if you want to move basically anywhere else in the world you’re going to be paying a lot more tax.

   To be fair to Japan, their income taxes are actually pretty average/low in the global scheme of things especially when you consider healthcare is baked in.

   As others have said, your issue isn’t tax, your issue is no visa.