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Tax as a Remote Worker living in Japan 2023/4/4 23:12
Hi there,
I've recently moved to Japan with my wife (Japanese National), and I'm on a spouse visa. My company back in my home country of New Zealand has agreed for me to continue working as I previously was but I have to sort out the tax situation myself.

I know that New Zealand and Japan has a Double Tax Agreement which I believe should cover my NZ based income from being double taxed but I am not sure about the specific processes I will need to follow.

I was initially under the impression that my income would be treated as Foreign Sourced Income but I have recently seen conflicting information that indicates that my income might be viewed Domestic Income because I am physically located in Japan. Can anyone in a similar situation confirm which way it might be?

Any advice would be appreciated.
Thanks!
by NZRemoter (guest)  

Re: Tax as a Remote Worker living in Japan 2023/4/5 07:53
Fellow Kiwi here.
I know that New Zealand and Japan has a Double Tax Agreement which I believe should cover my NZ based income from being double taxed but I am not sure about the specific processes I will need to follow.
Not quite as simple as that. If you have assets in NZ (house or even just a car), that makes you tax resident in NZ. Living in Japan more than 183 days out of 365 makes you tax resident in Japan. You need to use the "tie-break" provisions as set out in the IRD guidance. I suspect (most likely) is you will declare Japan as you principle place of residence, pay taxes in Japan on worldwide income, and become/declare non-resident in NZ for your tax returns there.
Having a double tax agreement does not exempt you from paying tax in both jurisdictions, you need to know which country you need to declare income in.
Of course, getting professional advice (in both countries) can help.
by JapanCustomTours rate this post as useful

Re: Tax as a Remote Worker living in Japan 2023/4/5 09:09
Please also see the income tax guide, particularly the section starting with page 6, where they talk about the different categories of taxpayers:

https://www.nta.go.jp/english/taxes/individual/pdf/incometax_2022/01.p...
by AK rate this post as useful

Re: Tax as a Remote Worker living in Japan 2023/4/5 10:19
Not quite as simple as that. If you have assets in NZ (house or even just a car), that makes you tax resident in NZ.
I only moved in January, and when I moved I sold up so the only thing I have left in NZ is a Savings account and some small investments. I'm currently thinking that I will be a Tax Resident in Japan, and then a Non-resident Taxpayer in New Zealand. My income is currently having income tax withheld each pay, and I'm not sure if there is a way to get that changed.

My NZ income is pretty important to covering my expenses, especially because I've just signed into a 2 year lease for an apartment. To say that I'm a little stressed is an understatement. I'm currently trying to find a good tax consultant in both NZ and Japan to help me navigate this. And if I end up having to switch to a Japan based role I'm likely to take a significant paycut, which won't be great. I was too native when planning to move to Japan and should have really done more due diligence (so for anyone planning to do something similar to me please plan properly before you fly).

Please also see the income tax guide, particularly the section starting with page 6, where they talk about the different categories of taxpayers:
I've been reading through a lot of this information. When I read I think I had a big misunderstanding because I thought my NZ income would count as Foreign Source Income, but it's seeming like my income will count as Domestic Income. And that changes my situation completely.
by NZRemoter rate this post as useful

Re: Tax as a Remote Worker living in Japan 2023/4/6 09:43
your key point is 外国税額控除.
you can estimate it at the tax-office website.
https://www.keisan.nta.go.jp/kyoutu/ky/sm/top#bsctrl
input 給与所得, 社会保険料控除額, 外国税額控除額
I try it temporary, 10000000 yen, 1500000yen, 2000000 yen. respectively.
the final income tax is 786500yen. but, your 外国税額控除額 is 803016yen.
so, the result is "no income tax in Japan".
you need to pay resident tax, following that 合計所得金額 is 8050000 yen.

try it.
by ken (guest) rate this post as useful

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