I’ll be moving to Japan in about a month to study my MBA full-time. When I announced I was leaving my job, my employer really wanted me to stay connected and sort-of consult for very few hours (5-10) a week. They are essentially converting me to part-part-time.
I don’t want to risk getting in trouble with Japanese immigration, so I’m not sure if I should accept the offer. Is anyone familiar with this situation? I’m not sure if it’s even allowed or goes against the 28 weekly hours working limit for students or even how it affects taxation.
Thank you for any input!
5 comments
If your status of residence is student you can request permission from immigration to work up to 28 hours per week. It doesn’t matter where your employer is or how many employers you have.
If you are paid for work you have done while residing in Japan then you owe Japan taxes on that income, regardless of where the employer is located or where the money is deposited.
So you should be fine, just don’t go over 28 hours total and make sure you file a tax adjustment to pay what you owe.
Your Japan tax situation depends on your residence status. For a non-permanent resident earning money overseas, you are only taxed on the portion that is remitted to Japan. So if you do not remit any of that income to Japan, it will not be subject to Japanese taxes.
The immigration departments of most countries have yet to catch up to the 21st century. The laws regarding student visas and work restrictions were established before the era of remote work, and so they don’t really anticipate this kind of situation (where you are a student in Japan, yet work for an overseas company and get paid overseas). The laws were established mostly to protect the local labor market. So your situation, where you are working remotely and getting paid remotely, really falls outside of the remit of the immigration department, so I wouldn’t worry too much about it as long as your company continues to pay into a US account.
For more detailed information, read the NTA’s tax guide here
https://www.nta.go.jp/english/taxes/individual/pdf/incometax_2021/01.pdf
Yes. I have previously confirmed with an immigration attorney in Japan that yes you can use your 28 weekly hours on a student visa to do remote work. Though as the other comments are pointing out, the real complexity with this is how you are taxed both in Japan and your home country.
Accept the offer, talk to immigration and get it sorted out. If, for whatever reason, immigration says no, tell your workplace.
You will need to apply for immigration’s permission to work up to 28 hours per week on your student visa. You may also need to tell them that you intend to do up to 10 hours of that 28 week allowance for a non-domiciled Japan employer too (after all the main purpose of your right to be in Japan is to be a student). Failure to first obtain immigration’s permission would be a violation of the ‘immigration control and refugee act’
The income would be defined as “domestic sourced income” even though it’s paid by an overseas employer, it’s still Japan sourced because the worker (you) are a tax resident of Japan physically in Japan whilst conducting the work.
This is something people miss comprehend. “Foreign sourced income” is income that is yielded from a domiciled foreign asset (hence why is usually passive in nature). If a tax resident of Japan is actively earning the income then the domicile source of that income is domestic (Japanese). If If say someone has financial securities (stocks) held on a broker overseas in CountryX, those stocks are domiciled to CountryX and thus any dividends yielded on those stocks are defined as “foreign sourced”. Capital gains from stocks however are defined as “income other than foreign sourced income” which since April 1st 2017 play by a different set of rules as foreign sourced income for NPRs
This means this income You (OP) are actively earning whilst you’re a tax resident of Japan and your person is physically in Japan earning it is taxable to Japan regardless if remitted to Japan or not, and regardless if you’re still a NPR (non-permanent resident for tax purposes) or not (basically what u/dalkry82 said is correct).
You will then need to consult the tax treaty to offset any double taxation, but the income HAS to be declared to Japan regardless. Failure to do so would not only be a violation of the ‘income tax act’, but also the ‘local tax act’, and ‘national health insurance act’ (NHI premiums are based on your previous years taxable income so not correctly declaring will mean you’re getting way cheaper NHI than you should), and should you apply for national pension exemption due to student with no income, then the ‘National pension act’ too.
Edit: just to clarify, how long is your course of study? If it’s <1 year, you could end up being considered a non-resident for tax purposes. In that event you’d still need the required permissions to work, but you’d have to pay 20.42% non-resident tax to Japan on your income from this work. But in that event you can also check the tax treaty agreement too. If your course if >1 year, then chances are you’re a tax resident of Japan, of which my original comment applies.