8% tax: How do I give it to the government?

Hi everyone,
I did a small translation job last month and the invoice format the company asked me to fill out adds 8% tax to the total.
For example: I am owed 10,000 but they will pay me 10,800.
What do I do with the 8%? Surely I have to give it to the government, but how and when?

My previous freelance experience has always been with the same companies and they've always retained a varying level of tax, usually 10.21% and then issue a Gensen-Choshu-Hyo with the previous year's earnings and tax retained, I just added this to other year end tax statements (I have about 5) and fill out my tax returns.

Anyone have any experience with this?

I think you do not need to this 8% to tax office.

In the case, the amount of your taxable sales ( kazei uriage daka ) of consumption tax is less than 10 million yen, you do not need to pay consumption tax to tax office.

Even if you charge 10,000 yen + 800 yen ( consumption tax ) to your client, you do not need to pay 800 yen to tax office.

You may think it is strange.
But,when you purchase a pen to conduct your job, you paid consumption tax.

As for withholding tax of 10.21%.

In the case a business person operates specific kind of job ( translation = hon yaku, judicial scrivener, etc ), when her client pays fee to her, the client needs to withdraw 10.21 % of her fee.

In the case, the amount of her fee is 100,000 yen, her client withholds 10210 yen.

Then the client pays 10210 yen to tax office.

Then, in the case rate of her income tax etc is less than 10.21 %, if she files tax return to tax office, a part of withholding tax is return to her.

If her taxable income is small, rate of her income tax etc is 10.21% .

So, she can receive money from tax office.

You can find information of rate of income tax and withholding tax in this website.
http://japanhousesaitama.lawyerjapanese.com/saitama/

I am sorry.
There was a typo.

" Then, in the case rate of her income tax etc is less than 10.21 %, if she files tax return to tax office, a part of withholding tax is return to her.

If her taxable income is small, rate of her income tax etc is less than 10.21% . ".

Does the company who is paying you know that you are an individual and not a corporation? If they know you are an individual, they should simply deduct the 10.21% (withholding tax - income tax) and give you "gensen choshu hyo" for the payment they made to you.

I am a freelancer too, and since my annual sales revenue is below 10 million yen (all payments added up), I am not liable for paying consumption tax (currently at 8%).

I am aware some entities that pay me specify the invoice format to state separately the fee & the consumption tax. I guess they are required to state the "product/service charge" and the "consumption tax" portions clearly separated. However, since I don't have to pay the consumption tax, I declare the total amount including the consumption tax portion as my revenue, and pay income taxes on it (after all the deductions, etc.).

If it is the first time you are dealing with this company, tell them you are an individual, and that you are not subject to consumption tax, and ask if they issue "gensen choshu hyo" early next year after deducting 10.21%.

Having said that, I just found out (doing my taxes right now) that one company simply didn't withhold any tax at all...

The short answer is, ask your local tax office to be sure.

The long answer: If you have never made more than 10 million yen per year, you don't have to pay consumption tax to the government for your business, but you are not supposed to receive any consumption tax from your client either (I confirmed this through the tax office about a year ago).

So, technically speaking, you are supposed to delete (or ignore) the 8% consumption tax mention from your invoice format that they gave you. (But you should make sure about the gen-sen, which is another story.)

However, if you have made more than 10 million yen a year in the past, then please refer to the following information for details on how it works.
http://www.sumoviva.jp/trend-tips/20150519_312.html

Hi everyone!

Thanks for your feedback.

I asked the company and they stated that this is an independent contractor job, and as such there will be no end of year tax slip and no retained tax.

This is for 2016 so I'll only be submitting it next year. I'll contact the tax office soon just to clarify, but it seems like it's OK.

Thanks again!