Hi everyone. (Please don’t leave aggressive or judgmental comments, people here tend to do sometimes, don’t please)
I currently work full-time at a company in Japan. I also do part-time freelance work for another company,(have permission for outside work on my residence card)
Besides that, I take additional freelance jobs on my own. This year, my side income may exceed 200,000 yen, so I want to make sure I understand my tax obligations properly.
Some of my freelance payments are sent in USD, and in many cases the money does not go into my Japanese bank account. Sometimes I send it directly to my family overseas.
My questions are:
If I receive freelance income through PayPal/Wise and not through a Japanese bank account, do I need to declare it in Japan for taxes? ( like what happens if I don’t should i like really really do it??)
Am I generally required to inform my full-time company that I do freelance work on weekends/free time, if my contract does not specifically prohibit side jobs?
What is the safest/legal best practice in this situation? I don’t want to accidentally create problems for myself later because I misunderstood the rules.
For context, all of the freelance work is in the same general creative field (animation/art/anime industry).
I’d really appreciate advice from people familiar with Japanese taxes, side jobs, or visa situations.
Thank you.
by Ok_Introduction_1867
8 comments
You declare your income during 確定申告 time. It was work completed in Japan
Use TTM on the day you get the income to calculate how much it was in yen
I don’t think you need to inform your full time unless it overlaps or interferes with it somehow
EDIT: This is wrong, note the comments below.
Have you been here more–or less–than five years? Are you remitting the income to Japan?
If you’ve been here more than five, then it’s income that you need to declare on your tax filing here. And the currency you are paid in, the location of the bank it is paid into, and whether you remit or not does not matter. As described by u/requiemofthesoul convert the amounts on the date paid. Use [https://www.murc-kawasesouba.jp/fx/past_3month.php](https://www.murc-kawasesouba.jp/fx/past_3month.php) to get the f/x rates (the dropdown menus below the calendars). Or, there’s a link there where you can downlown the rates for a specific year.
(I) Any work you get renumerated for that you did while residing in Japan is taxable by Japan.
(II) Any thing between you and your employer would
(1) at most be a civil matter (i.e. it’s not a crime to not tell them)
(2) their ability to limit is you is restricted by the Japanese constitution’s freedom of labor clause.
(III) Depending on your status of residence, it may not include working for employers / clients abroad.
Work done by you while in Japan is all taxable in Japan, regardless of where you receive the money. You will need to file a kakutei-shinkoku, but can deduct expenses incurred for the freelance work.
Technically you need immigration’s permission if on a regular work status to work for a non-Japan based client, but if you are paying taxes no one will notice probably.
Whether you have to inform your company depends on the type of work, but generally small freelance projects are probably not going to trigger a need for them to prevent you from working too much.
Sorry to break it to you but you always have to declare your side income if your total income whether from one job or multiple jobs exceeds 200,000 yen in the J financial year.
It doesn`t work like you think – if you make only 200,000 yen (roughly equivalent to 2,000 US bucks give or take the exchange rate at any time) as your TOTAL income in the Japanese financial year then that`s what you`re referring to in terms of not having to file.
But you obviously are earning over that so you have to add all your income together as a total, the J tax system has never said and never will that if you don`t make more than 200,000 yen at each job then it aint to be declared as taxable income.
Having said that, unless you`re earning a significant amount of money per month, it aint likely the tax office will be interested in auditing you to the point where they find out about paypal etc.
An interesting point here, by general city hall standards, 300,000 yen per month income is the baseline for `significant`. I know this because during Covid when a few of my friends` incomes collapsed to zero they were harassed by their city halls and threatened with garnished bank accounts to pay all the dues they couldn`t because until Covid killed their incomes, they were earning around 300,000 yen per month.
But the tax office just aint likely to zoom in on you and your paypal etc money unless you`re earning quite a lot higher than that.
Hi, yes are are fiscally resident in Japan so you have to declare it in Japan.
I have a main job while building apps, Uber delivery and currently writing a manga-style story.
If you don’t have job restrictions on your visa there is no problem with that.
– Your contract doesn’t have restrictions, so they don’t have any business with what you do with your spare time. Do not inform your company, every year around March you file for 確定申告 yourself.
– Side hustle income can be categorized as “Miscellaneous income” in your reports, unless you become a Sole Proprietor, then in that case it will be Business Income.
– Wise is registered business in the Japanese tax office if you receive income via Wise, that should be included in your final tax returns.
– Always save at least 10% of your total extra income of the year for tax payment.
– Always track your income and any expenses related to that side job, you will need the lumpsum value of all your annual income and expenses related to your freelance job to fill the forms.
– Track your income value in JPY too, you will need the currency exchange rate for the income you receive. If possible, exchange to Yen in the same day you got paid (fees may hurt but at least won’t have to claim losses later).
– Save all invoices/receipts digitally or physically in at least one safe place for at least a few years (Sole Proprietor need to save for 5+ years).
– If your main company doesn’t give you the Gensen 源泉 until the end of January, request it (do not have to give any reason to them, it’s your right).
– After you finish filing for kakutei shinkoku, pay the tax invoice the eTax system will give to you.
– Use freee (it’s a website/mobile app) to file for your “White” Kakutei Shinkoku, that service will guide you through all the steps in an user friendly way. The money for their subscription is worth it (you can subscribe one month, file the returns, then cancel, or keep using it to track your income and expenses).
– Safest way: Absolutely NEVER do anything “shady”, it will hurt you in the future. Always file for 確定申告 and make sure you do with the most honest and accurate numbers possible.
They have not way to know you got money in those other accounts, just saying…
Actually as you are employed and your company pays your taxed automatically, they already see you paying taxes and there is no way for them to know if your received other amounts of money as there is bank account privacy, again just saying…
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