I came to Japan in my first year with a Dependent Visa (family stay). Currently, I am enrolled in social insurance as a dependent under my spouse’s company. I also obtained a “Designated Activities Permit” that allows me to work up to 28 hours per week.
My income in Japan is less than 1 million yen, but before entering Japan I already held overseas stocks, from which I receive annual dividends exceeding 2 million yen. However, I have not remitted these funds into Japan.
My questions are as follows:
1. Do I need to declare and pay taxes on my overseas income?
2. Will my overseas income affect my insurance status, and should I change to National Health Insurance instead?
3. If I declare my overseas income, will this affect my status as a dependent?
4. If I lose my dependent status, will this have any impact on the renewal of my Dependent Visa?
5. If I make a profit of 2 million yen from stock trading, will there be any other impacts on taxation, insurance, or visa status?
Thank you so much for your help.
by chewchew111245
3 comments
>However, I have not remitted these funds into Japan.
Did you remit any funds into Japan from any source? If yes, that amount of your foreign source income becomes taxable in Japan. Japanese income tax law is clear on this.
(Note that use of foreign credit cards in Japan counts as a remittance.)
>1. Do I need to declare and pay taxes on my overseas income?
Only if it is in the scope of Japanese income tax, as explained above.
> Do I need to declare and pay taxes on my overseas income?
Dividends paid by foreign companies into an overseas bank account constitute “foreign-source income paid overseas”. Accordingly they are subject to remittance-based taxation when received by a foreigner during their first five years living in Japan. If you make any remittances of any funds in the same calendar year, the dividends will be taxable in Japan to the extent of the remittance.
> Will my overseas income affect my insurance status, and should I change to National Health Insurance instead?
Yes. There is no rule equivalent to “remittance-based taxation” for social insurance purposes. So you are currently earning too much to qualify for coverage as a dependent. Your spouse should notify their employer accordingly and you will need to enroll in national health insurance and national pension.
> If I declare my overseas income, will this affect my status as a dependent?
Whether the foreign income is taxable is not relevant for the purposes of health insurance/pension.
> If I lose my dependent status, will this have any impact on the renewal of my Dependent Visa?
People with dependent visas are not *required* to qualify as dependents for social insurance purposes, but immigration professionals tend to use it as a safe proxy indicator (i.e., if you qualify, then you don’t have to worry about visa eligibility).
Whether an income of 3 million yen per year is “too much” (in terms of visa eligibility) depends primarily on your spouse’s income. If your spouse earns a lot more than you, your income is probably fine. But if your spouse earns a similar amount, it is not clear that you are *financially dependent* on your spouse, which is a condition of the visa.
That said, the ISA is extremely unlikely to find out about any income that you are not required to declare for Japanese tax purposes. So in practice there would probably be no issues, as long as you aren’t making significant remittances.
> If I make a profit of 2 million yen from stock trading, will there be any other impacts on taxation, insurance, or visa status?
If you sell stock purchased before coming to Japan, capital gains derived from the sale will be subject to remittance-based taxation (like dividends). Regarding social insurance, you would need to check with your spouse’s employer. Some health insurance providers ignore one-off capital gains events, while many do not. And in terms of visa issues, the effect would be the same as the dividends: theoretically relevant but not worth worrying about in practice unless you make significant remittances.
If you sell stock purchased after coming to Japan, any capital gains derived from the sale will be taxable in Japan regardless of whether you make remittances. The situation with social insurance depends on whether your spouse’s health insurance provider ignores capital gains events. And since the income would need to be declared on your Japanese tax return, it would be a much bigger concern in terms of your visa status. Though it is possible the ISA would overlook a one-off capital gains event if you explained that it was a one-off event rather than a regular source of income.
Thank you so much for your detailed reply. I’m now very clear about the relationships between income, tax and healthcare insurance. I think my main concern is my visa status so it’s better I don’t receive too much overseas income.
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