Paid in Australia - but living in Japan

Hi Everybody,

I am keen to know if it is possible for me to keep being paid by my Australian company, but to work remotely from Japan. My wife is Japanese and I will be able to have a spouse visa.

The area I am unsure about is the period of time I can live in Japan, from a taxation perspective, and also if there are any rules on how tax needs to be declared and paid between Japan and Australia.

Thanks for any advice you can give,
Michael

Hi Michael,

Have a look at the following post, a Dutch guy had a similar question about paying tax in Japan while working for a Dutch company in Netherlands and paying local taxes there: https://www.japan-guide.com/forum/quereadisplay.html?0+173480

Regarding paying tax in Australia, Australia and Japan has a tax treaty, which should ensure that you are not going to be paying double tax. I feel it would be best to run this by an accountant on both ends (Australia & Japan).

uif it is possible for me to keep being paid by my Australian company, but to work remotely from Japanv
Assuming you have some sort of visa that allows you to live in Japan (which we'll cover in a bit), yes, it's possible to live in Japan, work remotely, and get paid by an Australian company, but only if your Australian employer agrees to such an arrangement.

uThe area I am unsure about is the period of time I can live in Japan, from a taxation perspective, and also if there are any rules on how tax needs to be declared and paid between Japan and Australia.v
Taxation does not affect the amount of time a person is allowed to live in Japan are not linked. It's the other way around - the amount of time you live in Japan affects how you're taxed.

Basically it looks like your situation is like this:
You're an Australian citizen, who works for an Australian company. Your wife is Japanese, and you want to move to Japan and live there while working remotely for your Australian company. You want to know if you can do this, how long you can do it for, and how you'll be taxed.

1. Can you do this?
As a non-citizen, in order to live in Japan, you'll need some sort of residency visa. The three main types are work, student, and spouse.
a. Work visa - If you're working for an Australian company, and doing work that doesn't require you to be in Japan, you won't be eligible for a work visa. There's no need, professionally, for you to be in Japan to do your job.
b. Student visa - If you're accepted to some sort of study program in Japan, you could be eligible for a student visa. However, this would then require you to attend classes as well. Working on a student visa is allowed, but the number of hours you're allowed to work is limited, and would not allow you to do a full-time job.
c. Spouse visa - This would be the most likely path for you. Your wife, as a citizen, would apply for you to live with her in Japan. This would essentially allow you to do any sort of work you want while living in Japan.

2. How long could you do it for?
That would depend on the length of the visa you receive. Work visas are usually three years (though some are shorter and some are longer), but as discussed above, your plan would not make you eligible for a work visa.

Student visa lengths are usually tied to the length of the program the student is attending.

Spouse visas, like work visas, are often three years, though again, some are shorter, and some are longer.

3. How would you be taxed?
Most governments, including Japan, levy taxes based on where the income is earned, not the worker's country of citizenship. As such, if you are living in Japan while working for an Australian company, you'll be paying taxes to the Japanese government (yes, even if your Australian company has no offices or staff other than you in Japan).

Likewise, most governments allow their citizens who are living and working abroad to file for an exemption of their home country taxes if they provide proof that they have paid taxes to another government.

For example, I am a U.S. citizen. Previously, while living in Japan, I did freelance work for a company based in the U.S. During that time, I filed a tax return with the Japanese tax authorities, paid my income tax to the Japanese government, filed the paperwork for an exemption to the U.S. tax authorities, and paid no U.S. income tax.

There are exceptions to this in special circumstances. U.S. citizens may be taxed by the U.S. government for foreign earnings if their income is especially high (I believe US$100,000 is where this kicks in), so you'd have to talk to a CPA or tax expert in Australia to know your specifics. But in broad terms, if you are living in Japan while earning money, you'll be paying taxes to the Japanese government, not the Australian one.

Thanks everybody for your input on this, I really appreciate you taking the time to respond to my question.

Visa/resident status: if you apply for and get gspouse of Japanese nationalh visa/resident status, that maybe 1, 3 or 5 years that you get granted. You go to apply for renewal/extension before the current one expires.

Taxes:
Please refer to the income tax guide, particularly starting at page 5, where they give you a guidance on who is considered gnon-permanent residenth and gpermanent residenth in terms of taxation (note that this term gpermanent residenth is not the same as visa/resident status category).
https://www.nta.go.jp/english/taxes/individual/pdf/incometax_2019/00.p...

In Japan, your resident taxes are determined based on the previous yearfs income, so the first year you donft really have to worry about paying taxes. Resident taxes for no income in Japan in the previous year would be low (or you might qualify as gdependenth of your wife).

From the second year on, you are going to be considered gnon-permanent resident,h so if your salary is deposited by the employer in your Australian bank account, and the portion of that received money you remit to your bank account in Japan will be considered taxable. You should keep a record of it, and do this tax return during Feb – Mar period of the year 2 you live in Japan. Based on that, your income taxes and your resident taxes will be determined, and you will get notified of how much youfd need to pay. Once youfve lived in Japan for 5 years, all your worldwide income becomes subject to taxation in Japan, no matter where you receive it.

I am not familiar with tax treaties, but so if there is one between Australia and Japan, and I assume you are taxed at home for the payments, so youfll go through procedures to eliminate/mitigate double income taxation.

Generally, 183 days (either full or part days) in any 365 day period. After being in Japan more than that, you have tax issues irrespective of your status of residence.
Do you still have assets in Australia (like a house or car), if so, you are probably also going to be deemed tax resident in Australia and be taxed there as well. Double taxation on your income is a real possibility.
Check the tax treaty/advisories, and if you are still unsure, consult a specialist accountant - one that knows about international taxation in Japan AND Australia.

As others have mentioned, you are not "working" in Japan, so your likely status will need to be spouse of a Japanese national - you don't qualify to stay more than 90-days otherwise.

To add:

The following is the information from the ATO on how the "Australian resident for tax purposes" status can be determined, there are a number of tests (the 183-day test is one of them): https://www.ato.gov.au/Individuals/international-tax-for-individuals/w...

Definitely +1 on seeking professional advice on this.