I have recently moved to Tokyo from the UK on a Working Holiday Visa and after hours of research I still can’t get my head around my tax status in Japan and what tax I need to pay to who.
I am a freelance video editor and while I am in Japan I will be working remotely for some clients back in the UK, working for some clients in Japan and maybe working for some clients in Australia and New Zealand.
From what I understand my tax status as someone who has been in Japan for less than a year is ‘Non-Resident for Tax Purposes’ meaning I pay around 20% tax on anything I earn. What I can’t seem to figure out is whether I pay tax only in Japan on all my earnings or if I only pay that tax on work done for companies within Japan and then pay UK tax for UK earnings for example.
I recently did my first job for a company based in Japan and when discussing invoicing they mentioned that they will apply a Withholding tax on whatever they pay me which for a Non-Resident would be around 20% – since this is me paying tax does that mean I would not need to pay any more tax when I do an income tax return at the end of the year? Would I even need to do a tax return? If I do, how do I do one and declare the withheld amount?
I am aware that I should probably just speak to a proffessional – any recomendations on people/ places that might know about this who can speak to me in English? (Don’t shout at me I’m learning the language this is just very complicated)
Hope that all makes sense, any help would be amazing.
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2 comments
First I have to say that I’m not a pro and I’m not living here long enough to have faced the problem, but I’m in a similar situation and already gathered some information.
From what I have gathered so far, there is a tax treaty between the eu/uk and Japan to avoid double taxation, you just have to decide where you want to pay taxes, and then get the right documents from the country you pay, and send it to the other.
I’m not exactly sure how it works when you work for japanese companies though, there might be a catch with that, so I hope someone with more knowledge will come along and gives a bit more insight on the whole thing, but until then, that’s all I can add.
/r/JapanFinance is your friend. 🙂