Working remotely for a foreign company

Hello all,

last year I moved to Japan on a spouse visa and have just now started working for my former company from Europe again - the company agreed that I can work remotely from Japan.

Now I know since I am a Japanese resident (non-permament for now) I have to pay income tax in Japan and not in Europe. I will therefore receive my income from the European company without any tax and social security deductions. In March 2024 I would file this income for 2023 in the tax form (converted from Euro to Yen per the exchange rate from the day that I received the payment) - and then pay the resulting income and residence tax.

Regarding the Japanese Pension Scheme: I already pay for that since I moved here. It is a "flat" rate of about 16000 yen per month - I don't think I have to change anything here regarding my "new" job.

Regarding the Japanese Health Insurance: This I also pay since moving to Japan (a rather low rate since neither me nor my wife had work since we moved to Japan last year). Once I paid income tax in 2024 for 2023 I understand that the amount I have to pay automatically changes (rises) in relation to the income that I stated in the tax form.

Is that the right course of action or have I missed something important? Can I for now just work and receive the salary without any deductions since I don't have to do anything before the tax filing next year? Thanks a lot in advance for any answers - I would appreciate it a lot!

Best regards
Matt

I have to pay income tax in Japan and not in Europe
Check that. You may still be liable for tax in your home country and deemed to be tax resident there. Japan does have double taxation agreements with many countries, but not all.
To give an example in my case, I would normally be considered to be liable for taxes in my home country (and Japan) simply because I own a car there. However, there is a "tie-break" provision in the tax agreement with Japan that means I do not have to pay income tax there.

Hello @Matt

I am in a similar situation (but working as a freelancer) and I would like to know if you have figured out how/when to pay taxes here in Japan?
I talked to the tax office in my home country and they told me that I am not liable for tax there.

I have an appointment with our local tax office in Tokyo next month, but honestly I think they will also struggle with this situation. I still receive my salary in the bank account in my home country and only transfer about 1/3 of the salary to my Japanese account every month.

Thanks for any update on your case!

Ivy,

I contacted the Japanese tax office (they have an English language hotline) and it's all pretty easy. Next march I will submit my tax declaration for 2023, and I will just convert the euro amount I received in my foreign bank account to yen (there is an "official" daily conversation rate by the bank of Japan, and I will use the rate of the day I received my - monthly - salary). For this amount I will then pay taxes in Japan (it will also be used to calculate my obligations for health insurance). It doesn't matter how much money (if at all) you transfer to your Japanese account - you have to pay tax for the full amount you received by your employer.
I don't know if it is the same for freelancers - it might be.

Cheers
Matt

you can get the deduction of 外国税額控除 the amount of income tax (postulated) which was withdrawn in your country from your salary.

you can make income tax declaration documents at the homepage of 国税庁.

Thank you Matt for your answer!

This is indeed very helpflul! :)