Although I can read what the tax levels are like in Japan, what are they like in real terms? I am planning to become resident in Japan next year (in one of the ways) but I will be working outside of Japan (and the UK) and getting paid in the UK and UK taxes are too high, Japans seems lower so I rather give my tax money to the Japanese so I have more money... I think anyway...
Japanese pension system is a joke like most things regarding the government. This is why I still pay my British pension (Voluntary Contributions) so when I reach 63 or what ever the age will be I'll get both even if I still live in Japan. The best thing about paying the British one is the low rate. Because I don't live in the UK any more (but have kept my citizenship) I don't use any services so I pay no tax. This makes the actual pension costs unbelievably low yet I still get the same back as those still living in the UK. Also when I die they'll ship my body back to the UK for what ever reason if so requested. Even better still, if I become sick I can still get British health care for free if I go back there for a short period. People who live in the UK knock the British system but you don't really know who lucky you are. The Japanese system is shit in comparison and this is arguably meant to be a more advanced country. Yakumo
And British health system is so expensive compared to French one. I'm talking about the state part, if you have a good health insurance company, no problem,but that is not free. That's probably why french health system has incredible debts those days,we're far too generous with anybody in the country,even not french (basically,meds,hospital,doctors consultations, all are free of charge).
The tax system here is amazingly complex for an expat. What you do really depends on how much money you think you'll make, and whether you truly qualify as a "resident". Old terms of resident, until about 2005 or so: Any person living in Japan for 5 consecutive years. To break this chain, you had to be gone for 180 days (consecutive). Then you could come back and start over. New terms: Any person living in Japan for 5 of the last 10 years. So someone like Yakumo or myself, is technically a resident. What does that mean? It means that your world-wide income is taxed by the Japanese government. You're not double-taxed, but they will make sure that your total to your home country + Japan is equal to what you would pay in Japan alone. Example: You pay some stupidly low tax in your home country... let's say 10%, even though you make a high wage, of let's say 10 million yen a year. In japan, that's about the 38% bracket I would say, when it's all said and done. Since you've paid 10% to the UK, Japan is going to make you pay them the remaining 28%. Remember that it's your world-wide income. Meaning money you make abroad, whether it be from assets, capital gains, or whatever, but *WHILE* you live in Japan. I'm pretty sure money you make while you're physically in the UK is untouchable by Japan. Conversely, what you make locally in Japan is pretty much always taxable by the local government (especially if you're working for someone else -- they're going to deduct it anyway). So something like capital gains, rent from properties, and things like that would be pretty hard to justify not being taxed from Japan. Money you make from man-whoring while on trips to other countries... probably they couldn't touch. I have another layer of horse shit as an American citizen, as we have to file taxes each year, regardless of country of residence. We have a massive amount of deductions ($80k USD or so of income, plus all of your housing up to about $70k USD, plus all your local taxes). So, you have to make a lot of dough to actually pay Uncle Same anything. Just remember when you file, there's some box they ask you to check of whether you "want to live in Japan forever". Has nothing to do w/ having PR or not. If you say yes, your rate is higher, so say no. One last point to think of: as Yakumo said, the pension system here is a massive cock sandwich. I mean... they lost like hundreds of thousands of records a couple of years ago, and told everyone to bring in their slips. Can you believe that? As such, you should think of paying into your home county's pension. I don't, as I'm paying into Japan's, but last time I left, I got all of my contributions erased in exchange for the last three years of payments. It was a decent amount of cash. All in all, it was actually a good trade for me, but technically I've now not paid into the Japanese system. I'm not sure where I will retire here or not, but I know I can handle the money way better than the government. I'm not a pro, but I've spent many meetings with my CPA on this shit. I highly recommend you get someone that has experience with this stuff. I can recommend you my guy, whom I'm quite fond of. His office is in Saitama even.
My Japanese accountant summed it up like this: Personal tax 5%, corporate tax 35%. I have my own corporation in Japan so it can sponsor my visa and I just sent off the numbers to my accountant today. My business barely broke even, but I had a decent salary. GaijinPunch....you aren't taxed up to $80,000, but you still have to pay for social security, so you will owe Uncle Sam something every year. I think anyone can join the Japanese pension system, or at least one of them. You pay 10,000 a month (or 20,000?) and you get a return after 20 years. Japan and the UK have pension re*****city, the US and Japan don't. That worries me a bit since I haven't paid much into social security for the last few years, but then again social security is set to lose money the year before I'm due to collect so I'm guessing that will be right when they decide to start slashing benefits. Either I'll feel lucky or I'll feel like a sucker. I guess I'll know in 30 years.
There are only two tax rates for corporations in Japan. 22% (or maybe 23%) and 30%. That's it. 5% for personal? Not legally... he must be writing off tons... which of course anyone that owns a business does. Fire your CPA, dude. Tax exemption is just that: tax exempt (including social security). Perhaps you have to pay into it the US system if you don't pay into the Japanese system. I've always payed into Japan's though. My returns were also re-examined when my wife got her Green Card, and I didn't pay a dime into SS for those 3 years they checked. How much you pay depends on how much you make, and when you get it depends on your age. The 20 years thing is the minimum amount of years you have to pay in to *GET* a return at all. Pretty sure you have to be retirement age to collect though. They do TV specials on it all the time. In fact, don't quote me on this, but I think you have to pay into it for 20 years BEFORE you hit the eligible age. So if you've not paid a dime into it, and you're 46, and the legal age for retirement is 65, you're fucked... or saved... depending on how it turns out. This. You know it's bad when they have commercials w/ the prime minister saying they'll "fix the problem".
Thanks Gaijinpunch for answering the question properly, I think I might need to get proper advice, especially as I want to get my UK wages paid straight into a Japanese bank account.
No problem. In that case, I would highly recommend getting a proper zeirishi (maybe one in the UK as well) and deciding which tax home offers the best deal. Japan is a sort of "write off heaven" compared to the US, if you will, so it was a no-brainer. Not sure about the UK.
