Non-Permanent Residents: Income Earned in Japan or Remitted from Abroad
One of the most common misconceptions among foreigners living in Japan is that they are only taxed on income earned within Japan. However, for non-permanent residents, Japan’s tax system can apply to income earned domestically and certain income brought into Japan from overseas.
The term “brought-in income” refers to remittances and also includes using credit cards from overseas banks in Japan.
If you become a permanent resident, you must file a tax return, including your overseas income.
Your Visa Status Doesn’t Determine Your Tax Liability
It’s important to understand that Japan’s tax laws operate independently of your visa status. Even if you are on a specific type of residency permit, this does not exempt you from the possibility of paying taxes on foreign income if you are a permanent resident.
Avoid Penalties by Staying Informed
To avoid surprise tax bills, it’s crucial to stay informed about your tax obligations. If you, as a non-permanent resident, remit funds from abroad, even if it’s income earned outside Japan, you may need to report and pay taxes on that income. Failing to do so can result in penalties. Ensure that you consult with a tax professional to avoid any unpleasant surprises and stay compliant with Japan’s tax system.
By understanding these key points, you can better manage your finances and avoid the risk of back taxes and penalties.
