Is it typical for Japanese outsourcers to withhold tax from freelancers?
Thread poster: Gabriel Mendoza

Gabriel Mendoza  Identity Verified
Japan
Local time: 17:07
Japanese to English
Feb 3, 2011

I'm not very familiar with how the tax system works in Japan although I've been living here for quite some time now. Similarly, I don't have previous experience dealing with Japanese translation outsourcers because most of my clients come from overseas. I was just surprised to see that the Japanese outsourcer I recently worked with withheld 10% tax from the invoice total. Is this common? Is this because of the fact that I'm IN Japan? My understanding is that freelancers aren't supposed to pay withholding tax per job because it's their responsibility to claim their income at the end of the year and make the necessary payments themselves.

 

Miyuki Ueno  Identity Verified
Japan
Local time: 17:07
Member
English to Japanese
Yes Feb 3, 2011

It's common. It's called "源泉徴収".
You can get it back by filing a tax return.

Maybe you can get info here.
http://www.nta.go.jp/foreign_language/index.htm


 

Annerose MB  Identity Verified

Local time: 09:07
English to French
Yes Feb 3, 2011

Yes, it is common. The agencies I work with do it and send me a certificate end of January or begin of February, listing how much was paid and withdrawn, to be used for my tax return.

It will also happen with government entities (such as prefecture or city offices) if you do some teaching, etc. Same system.


[Edited at 2011-02-03 03:18 GMT]


 

Yasutomo Kanazawa  Identity Verified
Local time: 17:07
English to Japanese
+ ...
Few more tips. Feb 3, 2011

uenomiyuki wrote:

It's common. It's called "源泉徴収".
You can get it back by filing a tax return.

Maybe you can get info here.
http://www.nta.go.jp/foreign_language/index.htm



Ueno-san's link would be very helpful, but let me just add few more things.

It is common AND MANDATORY for Japanese agencies to deduct and withhold 10% of your income. Like Annerose pointed out, each Japanese agency will send you a certificate listing how much you earned and how much they withheld. You can claim them back at your local tax office when you file for your annual income tax return (確定申告)which usually starts from mid February (around the 15th) and ends at mid March (around the 15th or 16th).

You can also file your annual income tax returns online.


 

Miyuki Ueno  Identity Verified
Japan
Local time: 17:07
Member
English to Japanese
It will be hectic! Feb 3, 2011

As Kanazawa-san mentioned, you can do everything on line now. BUT you have to get something ready in advance or you have to fill out some documents, print out, put in envelope with other papers, and post it.

Usually, February and March is really hectic season for all self-employed people. I highly recommend you get ready soon.

Good luck!


 

Gabriel Mendoza  Identity Verified
Japan
Local time: 17:07
Japanese to English
TOPIC STARTER
Thank you! Feb 7, 2011

Thanks for all your help guys. Cheers!

 


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Is it typical for Japanese outsourcers to withhold tax from freelancers?

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