Individual tax return, and foreign asset reporting
Individual income tax return
Tax liability for foreign individual who work in Japan vary in accordance with its resident status. Resident status is principally judged based on the number of days staying in Japan or contract period. Regarding salary for foreign employees in Japan, you should consider tax treaty between Japan and home country, the necessity of withholding tax or tax return filings, and employment status (employee or director) before the starting date of assignment. For specialists such as singers and athletes, you should consider the specific tax treatment.
Foreign asset reporting
Resident except for Non-permanent resident should file annual foreign asset report by March 15th of the following year if you keep over JPY 50million of properties outside Japan as of December 31 every year. Violators of the law are to face a maximum of 1 year imprisonment or a fine of up to JPY 500,000. We provide all services for both Japanese and non-Japanese such as visa application, tax saving consultation, and all tax return filings. Please feel free to inquire.
Gross up payroll
You will need professional support for gross up payroll calculation for expats. In contrast to local hired employees, you should consider labor laws in all countries where the payers of expats’ salary are located. Employers should consider not only specific payroll calculation but taxes or social security premiums based on gross up payroll. Income tax will be imposed on allowances including income tax, inhabitant tax and social security taxes paid for expats by employers. Additionally, taxpayers with double income or employees who earn over JPY 20 million salaries should file individual income tax return every year in Japan. We have a variety of professionals such as Japanese certified tax accountants, Labor and Social Security Attorney and CPAs from the world outside Japan for providing all services you need.
Consultation and filings for international inheritance or gift
Inheritance and gift across the countries such as Japanese parent has passed away in abroad or gift from parents living outside Japan to Japan resident children is increasingly becoming common. In such case, taxpayers must take additional procedures and documents like followings.
In the case that non-resident heirs are unable to prepare seal registration certificate in Japan, a signature certificate should be attached with their tax returns. Also, non-resident heirs need a proof of residence outside Japan such as a certificate of home address in foreign countries. They must visit an institution like the notary office of the competent authority of the local government or Japanese embassy for preparing those documents.
If heirs live abroad, he/she must appoint a tax administrator and submit a notification to the tax office. Those procedures are principally handled by professional agent.
You might know special devaluation rule for small-scale residential land at inheritance. This rule is also applicable to non-residents if certain requirements are met. The amount of inheritance tax varies greatly depending on the applicability of special tax rules, hence, it is necessary for taxpayers to find specialists who can provide better solution especially for you in advance.
In the case that the heirs live abroad, it takes longer to prepare required documents for filings and fund for tax payment. We recommend you prepare in good time.
We offer all support services you need such as tax saving consultation, documents preparation and tax return filings both in English and Japanese.
Consideration for tax treaty, and preparation of application form for income tax convention
Japan has 70 tax treaties between 123 countries and areas as well as tax information exchange agreements with other countries/areas as of October 1, 2017.
Tax treaties have priority over the domestic tax laws, and they have the effect of reducing or exempting your taxes in Japan or abroad.
It should be effective for entities with overseas transactions and an individual who provides services both in Japan and abroad to consider not only domestic law but also tax treaties with all countries where the transactions and/or services will be rendered in advance.
In the case where tax treaties are applied, nonresidents who receive payments generally submit the "notification form of tax treaty" to the payer’s principal tax office through the payer before the first payment date.
You may also be able to submit the notification after the first payment date, but the procedure will be complicated.
Preliminarily consideration for application of tax treaties might be able to reduce or exempt taxes as well as set more accurate transaction prices.