Hello everyone,
I’m a teacher working with different schools. One of them asked me to register for this new tax. It will take effect pretty soon. Should I register? Could you tell me more about it? They told me they might reduce my salary if I don’t.
2 comments
Man you are way late to the party. Google Japan Invoice System 2023 and get your application in QUICK.
From what I understand about the whole system:
Companies that legally treat you like an independent contractor (whether it’s the actual situation or not) also have to pay taxes on your services. Many companies (especially those that use this independent contractor employment status to avoid costs) don’t pay taxes on your services.
Starting October, these companies will pay taxes on your service fee by default, but they can get a rebate on those taxes if you register for the invoice system. Basically an incentive to get people on a system that is better tracked.
So when they say they might lower your salary, what they’re really saying is they want to pay the same amount they did before, the amount your pay is reduced will be cut out as tax.
Do be aware though that this rebate isn’t forever – the rebate amount will get smaller every two years (I think? can’t remember), so at some point your company might just reduce your pay anyway.