I'm a Japan based software engineer contracting with a US company with no Japan presence (either in terms of client base or operations).
I just got a multi-page questionnaire from the NTA asking about the details of my self proprietorship: things like working hours, whether I have only one client, what kind of equipment did I get from the client and so on. I understand what they're getting at: they're trying to sniff out employment-in-disguise type relationships because such people tend to pay less in terms of social insurance and other taxes.
I plan on answering this honestly because I have nothing to hide. At the end of the day, I don't wish to be an "employee in disguise" but this company legitimately doesn't do any sort of business here and it is not possible for me to become an employee in any capacity.
What are the possible outcomes here? I understand that they might claim I'm really an employee, but what would that result in? My client isn't simply going to open a Japan office just for me. I know it is not illegal to sell software development services to any legal (non-sanctioned) entity in the world and they don't have a recourse in stopping me from doing so. I have always reported and paid any taxes incurred. There also doesn't seem to be a legal framework for this type of situation other than sole proprietorship (or opening a company selling a B2B consulting service, but that's just more paperwork for pretty much the same thing).
If my client did in fact have a base of operations here, the NTA would have a very strong case in my opinion. As it currently stands, I don't see what they can do about it.
Has anyone dealt with this before?
Thanks for the advice.
by Asleep-Assignment731