Hi everyone,
I am moving to Japan in early January (not on 1st) and gathered a lot of information on taxes but would appreciate your comments because the situation seems quite convoluted and confusing to me and I would like to roughly understand what I am getting into right now to make the necessary preparations such as savings etc. I am fully aware this is not professional tax advice. Here is some information / data:
-Going to language school as a student. Assumption is no employment income
-I got dividend income from non-Japanese stocks and funds that can cover all my expenses. I am assuming every expense will "count" as remittance, because I am bringing money into Japan one way or the other. This means I will collect all documents on transfers into Japan and credit card bills etc.
Questions:
-This income will be taxed according to the "usual" income tax brackets even though it actually came from capital gains / dividends, correct ?
-I would have to pay residence tax too, but not in the first year since I did not enter on 1st of January, correct ?
-I can't use the "earned income / employment income deduction", because this is not employment income even though I must pay the same tax rates, correct ?
-I can use foreign tax credits because of US withholding tax paid on the dividends, correct ?
-In my first year I would not have to pay a lot for pension and health insurance but starting from the second year they would deduct more, because they would look at my first year's taxable income, even though usually capital gains / dividends would not be considered for this for an employee, correct ?
by gundahir