Living in US and Paying Taxes on Japan Source Income
Thread poster: tekcop

tekcop
United States
Jul 30, 2015

Hi everyone!

I've been working freelance as a Japanese to English translator for a few years now and since I've lived in the US that whole time, I've only paid income taxes in the US. My income sources are about 50/50 US/Japanese right now. I recently sent my resume to a translation agency in Japan and they responded back with an e-mail about non-resident withholdings (海外在住の方(非居住者)からの源泉徴収税額). They gave me the option of letting them withhold 20% of my income from them for domestic source income (国内源泉所得) or sending some sort of document to their local tax offer regarding the US/Japan tax treaty, but I don't know anything about any of that. Now I'm starting to worry that I haven't been paying tax in Japan that I should have been all this time.

Does anyone here have any experience with this issue?


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maryblack  Identity Verified
United States
Local time: 22:07
Member (2013)
Spanish to English
+ ...
IRS form 6166 - tax residency Jul 30, 2015

I had the same problem when I moved from Spain to the U.S. and had -still have!- all my clients abroad. They also wanted to take out taxes unless I could produce a form in accordance with a tax treaty certifying that my tax residency was in the U.S.

After much digging, I found out that that form is 6166 (general info: http://www.irs.gov/Individuals/International-Taxpayers/Form-6166---Certification-of-U.S.-Tax-Residency), which you get by filling out form 8802 (http://www.irs.gov/Individuals/International-Taxpayers/Form-8802,-Application-for-United-States-Residency-Certification---Additional-Certification-Requests). Essentially, the Japanese authorities need to know that you're not engaging in money-laundering, that is, that you're paying taxes SOMEWHERE.

Without digging too much, I did follow the link on tax treaties to see if Japan has one with the U.S. and found this: http://www.irs.gov/Individuals/International-Taxpayers/Tax-Treaties. At this link on that page (http://www.irs.gov/Individuals/International-Taxpayers/The-Transition-Rules-Regarding-Articles-19-and-20-of-the-USA-Japan-Income-Tax-Treaty-of-2003) I saw that there is some special rule with regard to Japan, which, again, I did not read, but it should have all the info you need!

You might want to find an accountant to help you with all this, although I have to admit that the accounts I spoke to were entirely useless! Calling the IRS is another option, but good luck actually speaking to a human being.

And good luck in general!!





[Edited at 2015-07-30 20:10 GMT]

[Edited at 2015-07-30 20:11 GMT]


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Sheila Wilson  Identity Verified
Spain
Local time: 04:07
Member (2007)
English
+ ...
This whole thing about client-country taxes is getting ridiculous Jul 31, 2015

I never had a single problem in the first 10 years of working with clients around the world. I submitted my invoices to all five continents; I presume my clients paid their taxes in their countries; I certainly paid mine locally.

Then a few years back I got my first W8-BEN to sign, to state that I wasn't subject to US fiscal rules but paid taxes elsewhere. But that wasn't too onerous - the agency sent the form and told me exactly what to fill in, where.

But just lately we've been having question after question raised in the forums about clients in various countries wanting to tax the translator. And now I've received a warning from a new Romanian client that I'll have to come up with a Spanish fiscal residency certificate of have 20% deducted from my invoice. Research shows that it appears to be true: although I've never set foot in the country and never had an employment contract there, they still have the nerve to try to tax me. So I'm supposed to pay the Romanian tax authorities 20% and the Spanish tax authorities another 20%+? Oh no, I won't!!!

I don't know why our accountants aren't better informed but mine is having a hell of a job coming up with the appropriate certificate. He's clearly never heard of it although it can be found on the web.


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