How does it work? Any experience before heading to an accountant? I have been offered a permanent contract for an American Company (remote from Japan), I am a sole trader in Japan, I hold a PR visa and I am not an American citizen. I thought paying all of my taxes in Japan would be enough, however I am now having some doubts as the US company might need to withdraw some money as well and consequentially I would nee dot pay less taxes myself.
Any insight? Thanks!
4 comments
You might wanna talk to HR about this. Ask if you need an ITIN or something since you’re not eligible for SSN.
I’m not sure the definition of a “permanent contract”, but if you are a contract worker (for the American company) there is nothing deducted — you are not an employee and thus they are paying you for a “service rendered”. Nor would you be required to pay taxes in the US.
However, where a lot of (US) companies mess up, is misclassifying their workers as contractors when they really should be classified as employees. This is true for both domestic and foreign workers. If the American company misclassified you, 1) they will be heavily penalized and 2) you could then be subjected to (back) taxable wage withholdings. Although in reality the company would likely be required to terminate your contract given they couldn’t easily convert you to an employee being a foreign worker.
I would suggest you read up on American contractor employment laws to help protect yourself and ensure you are really classified as a contractor (meaning you set your own working hours, etc).
You aren’t obligated to pay US taxes if you aren’t a US citizen or resident. You would need to claim tax-exempt status with your employer in order to avoid having withholding taxes deducted from your pay.
The answers here seem to be on track (to my inexpert eyes), but you might also ask about this at r/JapanFinance –that sub is not really for american tax issues, but there may be someone who can help, confirm what’s being said here, etc.