u/starkimpossibility

FWIW I bought a small amount of BatBucks in 2019 and I am up ~9,000% atm.

I’m wondering if there’s something where they’re putting down employees as “freelance” in some way, although on my contract at least it’s phrased as “independent contractor”.

For Japanese tax purposes there are only two possible ways to sell your labor: as an employee, or as a non-employee. Non-employees get described as "independent contractors", "contractors", "freelancers", "service providers", and all sorts of other terms. But the fact is that, legally, they are all in the same category (non-employees).

The interesting part of the rules governing the withholding of income tax from payments to non-residents is that they do not distinguish between employees and non-employees. They just say, effectively, "if you pay a non-resident to do something in Japan for you, you must withhold 20.42% income tax regardless of whether they are an employee or non-employee".

It is possible that your payers are mistakenly thinking that the fact you are not an employee means they don't have to withhold, which could be true if you were a resident, but is not true if you are a non-resident.

they don’t always seem sure about what WHV/non-resident status entails

Yeah the 20.42% non-resident rate is entirely a national income tax issue, so I would not expect municipalities or municipal officials to know much about it. The appropriate place to inquire would be your local NTA office.

As they’re not withholding, would the Article 172 still be the correct declaration?

No, it doesn't work like that. When the payer is Japanese, the obligation to pay 20.42% to the NTA belongs to the payer, not the payee. And it is a non-transferrable obligation. If the payer doesn't withhold properly at the time of payment, one of two things can happen:

• the NTA never realizes that the payer failed to withhold 20.42%, you keep your full paycheck, and the payer gets away with tax evasion;
• at some point in the next five years, the NTA realizes that the payer failed to withhold 20.42%, the NTA takes enforcement action against the payer (which could theoretically include criminal penalties), and the payer demands that you return 20.42% of your paycheck (which would be a legal demand).

Because your payer is Japanese, there is no way for you to settle this liability directly with the NTA. If you want to be proactive, your only options would be to (1) remind the payer of their withholding obligations—including the significant penalties potentially associated with failure to do so, or (2) tip-off the NTA that your previous payer is not withholding properly.

The only possible wrinkle here would be if your payer believes (in good faith, and in possession of all relevant facts) that you are a tax resident of Japan, not a non-resident. In that case, their failure to withhold would make sense. And in that scenario, your options would be: (1) convince the payer that they are wrong, (2) ask the NTA to confirm your non-resident status and notify the payer accordingly, or (3) accept the payer's conclusion.

If you choose (3), you will owe 10% residence tax on your taxable income, but you will not owe 20.42% income tax. (You will owe no income tax because the basic deduction for residents for income tax purposes is 1.04 million yen and the payer will declare the funds as having been paid to a tax resident of Japan.)

I’m assuming it was indeed a moving-in notification based on what the UK embassy instructed me to ask for

Since you said you received NHI payment slips, it was clearly a moving-in notification. Unfortunately, Japanese embassies overseas give notoriously vague advice about this issue. For example, if you look at the Japanese embassy in the UK's website, they say that working-holiday visa holders should obtain private health insurance because they will probably not be covered by the Japanese national system, but they also say working-holiday visa holders should enrol in Japanese health insurance (if they have an "address").

This contradiction is explained by two factors. First, overseas embassies are under pressure to ensure that no working-holiday visa holder is ever in Japan without being either enrolled in NHI or having comprehensive private health insurance. That is the scenario that the government is very focused on preventing. But this often ends up with embassies effectively telling working-holiday visa holders that they must do both, which is completely unnecessary.

Second, embassy staff often translate 住所 as "address", without realizing (or caring about) the confusion it could cause. (As discussed earlier, 住所 is a term with a specific legal definition, much more akin to "domicile".) So they will say things like, "you must join the resident register within 14 days of acquiring an address", which is true if by "address" you mean 住所, but most English-speakers will not automatically read "address" as "domicile" and will assume that any residential address qualifies.

I also got myself a MyNumber card for online banking reasons which I feel like might not help my case for asserting non-residency

That's true. Only foreigners whose domicile is in Japan can have a MyNumber or a MyNumber Card. But as discussed above, municipalities do not typically argue with foreigners who claim to have a domicile in Japan.

I’m a teacher working as an “independent contractor” for two different schools - would the Article 172 Declaration still be what I’d use?

Are they Japanese schools or overseas schools? If the schools are Japanese, you shouldn't need to submit either an Article 172 Declaration or a tax return. The schools should withhold 20.42% (even if you are an independent contractor rather than an employee). And that will be the final settlement of your income tax liability. If the schools determine you are a tax resident of Japan, they will withhold at a much lower rate. But either way, the tax liability belongs to the school, not to you. And it is the school that has responsibility for accurately determining your tax residence status.

how can I know whether or not in June the municipality is going to say “you owe us residence tax because of what you told us”?

That's a fair question. Of course, you would need to file a moving-out notice before you leave, so that would be the time to ask about residence tax. But I doubt your municipality will say definitively at that time that you will not owe residence tax (because by late March they will not have received tax return details from the NTA yet, so even if you said you didn't file a regular income tax return, they wouldn't be able to confirm that).

Instead, they will probably just say "maybe you will receive a bill". In which case, yeah, appointing a representative and waiting to see if they receive anything would probably be the best strategy. But if the payers are Japanese and they withhold 20.42%, or if the payers are foreign and you file an Article 172 Declaration, I highly doubt your municipality will issue a residence tax bill.

the results seem to present the Jan 1st change as a hard and fast rule.

From your municipality's point of view, if you have told them your domicile is in Japan (by filing a moving-in notification), they are entitled to levy residence tax. That is what you were probably finding.

But as detailed in the comment I linked previously, and many other past threads, working-holiday visa holders should only file a moving-in notification if their domicile is in Japan (a minority of cases). If their domicile is not in Japan, they should submit an address notification to their municipality instead.

income tax and residence tax are essentially different/separate systems, there is not necessarily a contradiction in saying you are “non-resident” who owes 20.42% income tax

They are separate in some administrative ways, but the key point is that the legal test for residency is exactly the same for both cases (in terms of whether your domicile is in Japan). Both the Local Tax Law and Income Tax Law defer to Article 22 of the Civil Code with respect to the concept of a domicile (住所). So legally it never makes sense to say you have a domicile in Japan "for residence tax purposes but not for income tax purposes". The underlying legal test is identical.

Incidentally, the test for National Pension and National Health Insurance liability also relies on Article 22 of the Civil Code. That's why working-holiday visa holders should always either (1) submit a moving-in notification, owe 10% residence tax, pay normal income tax rates (with deductions), pay NHI premiums and National Pension contributions, or (2) submit an address notification, owe no residence tax, pay 20.42% income tax, have no access to National Health Insurance (private health insurance is typically required by embassies instead), and have no National Pension obligations.

That's how the law is set up, at least. But in practice, municipalities typically have no incentive to argue with a working-holiday visa holder who wants to submit a moving-in notification (instead of an address notification), declaring that their domicile is in Japan. Whereas the NTA is keen to collect 20.42% (with no deductions) from people whose domicile is not in Japan.

What that means is that it is indeed possible, in practice, for someone to tell a municipality their domicile is in Japan even though the NTA (correctly) insists it is not. Legally, there is no basis for that scenario. But is is possible in practice due to the relevant agencies having different incentives.

is there something I should do when filing the income tax to try and communicate my temporary status?

What kind of business are you engaged in? Assuming it is the provision of services (consulting, translating, software, etc.), the form you use for declaring your income to the NTA is completely different, depending on whether your domicile is in Japan (i.e., whether you are a tax resident).

If your domicile is in Japan, you would use a regular income tax return to declare your income. If your domicile is outside Japan, you would use an Article 172 Declaration instead.

If you submit a regular income tax return, you will be asked to specify which municipality your domicile is in, and the NTA will send your tax return details to that municipality so that the municipality can levy residence tax.

If you submit an Article 172 Declaration, the NTA won't send your income details to anyone. So your municipality won't have any basis on which to levy residence tax. In practice, that would probably mean you wouldn't have to pay residence tax. Though in the worst-case scenario your municipality could theoretically say "you told us your domicile is in Japan so you must declare your income to us so that we can levy residence tax".

the amount of residence tax I’ll likely owe (I understand the 20.42% income tax

Residence tax is only payable by people whose 住所 (domicile) is in Japan. People whose domicile is in Japan are tax residents and do not pay the 20.42% rate of income tax. So your question doesn't really make sense. Either you are a tax resident of Japan and you will pay residence tax on your income (~10% of taxable income) as well as regular income tax, or you are not a tax resident of Japan and you will not owe residence tax on your income (just 20.42% income tax).

we are still classed as non-residents?

The nature of working-holiday visas is that most people who use them do not become Japanese tax residents. But it is possible to be a Japanese tax resident on a working-holiday visa. It just depends on the circumstances of your life, occupation, residential accommodation arrangements, etc. The fact you are on a working-holiday visa does not automatically make you either a resident or a non-resident. This issue has been discussed quite a few times in previous threads, which you might want to take a look at. See here, for example.

I strongly suggest to always use 特定 with 源泉徴収あり unless you have losses from other sources to declare

There are some advantages to using a withholding-type account, but there can also be financial disadvantages. I don't think a general recommendation to always use withholding is reasonable without explaining the downsides.

There are technically three different types of accounts to choose from: general (一般), withholding-type designated (特定) and no-withholding-type designated. There are advantages and disadvantages to each type. See this post for a detailed discussion of the differencess.

If the stock you are buying can be purchased in a designated (特定) account, there is no significant reason to use a general account. So the choice is just between a withholding-type and no-withholding-type designated account. See the linked post for a full comparison.

"tax resident" is defined as the country you are taxed because you live there ?

Correct.

if your tax residence is not japan, if you work and live outside of japan at the time of death you should not be concerned, with no specific cutoffs in time

That's right, as long as you are not (and have never been) a Japanese citizen, and the person you are inheriting from has no ties to Japan, and the assets you inherit are not located in Japan.

its what almost all Japanese people I know did though

Yes, it happens. But there have been cases where municipalities unilaterally removed (Japanese) people from the resident register because they determined that they didn't actually live in the municipality and were only on the register for the purposes of sending their children to public schools or using national health insurance. Enforcement exists, but it is certainly patchy and the fines are laughable so many people consider it to be worth the risk.

Yes, you will definitely qualify for a Japanese pension in that case. This (PDF) is the form that you need to submit to the pension office.

You will also qualify for a CPP benefit, of course.

Nomura the brokerage that hold/held the MRF and Thai investment fund is the direct shareholder and that I am just a customer of the Nomura brokerage

What does she mean by "customer"? Both the MRF and the Thai investment fund are nongrantor trusts and you are the beneficiary. PFIC regulations(8)(iii)(C)) make it clear that having a beneficial interest in a nongrantor trust makes you the owner of your share of the trust assets for the purposes of Form 8621.

Is she saying that Nomura is the beneficiary of the trust? That should be fairly easy to disprove by looking at the prospectus, etc.

If I sold stocks before my arrival with a loss, can that be used to offset gains made with stocks I bought after my arrival?

No, per the NTA's guidance here%E3%81%AE%E8%A8%88%E7%AE%97%E3%81%AF%E8%A1%8C%E3%82%8F%E3%81%AA%E3%81%84%E3%80%82), you can't use gains/losses subject to remittance-based taxation to offset gains/losses subject to regular taxation. However, you can use losses subject to remittance-based taxation to offset gains subject to remittance-based taxation.

In other words, if you remitted 100,000 yen and you had 80,000 yen worth of gains subject to remittance-based taxation as well as 90,000 yen worth of losses subject to remittance-based taxation, your 80,000 yen worth of gains would not be taxable in Japan. (This is assuming they are within the same category of income.)

Do you mean a Japanese pension office? How many years of contributions to the Japanese system do you have?

one should not write the insurance premium if it's not under the employee's name

That's not correct. As u/sylentshooter said, you should not write an insurance premium in a family member's name unless you can prove that you are the one who paid the premium.

If your spouse was paying the premium, the way to fix this is to file an income tax return for each of the relevant years. You can do it online and if you only had employment income (and still have your annual withholding summaries), it will be extremely simple.

converting USD to yen and the FX gains from that are "Japan-source income"?

Yes.

Disposal of cryptocurrency - is this also 'Japan-source income' in all cases (even if purchased before Japan residency)?

Yes.

sales of US stocks/mutual funds/ETFs (purchased before Japan residency) are 'foreign-source income' because those are capital assets?

It's because they are "securities", under Japanese tax law. Soon, cryptocurrency will also be regulated as a security. At that point, it is possible that it will be brought within the 特定有価証券 umbrella and able to benefit from treatment as foreign-source if purchased before coming to Japan. But for now, your understanding is correct.

I've read some posts here but those are ~2-3 years old at this point

Everything here, here, and here still applies.

my rental income will be less than the loan repayments. This will net a loss that I'll use to reduce my taxable income

Only the interest portion of loan repayments is deductible, so the relationship between your loan repayments and your rental income is basically irrelevant for tax purposes. The only meaningful deductible loss is the statutory depreciation of the building. But as explained in detail in the posts linked above, statutory depreciation is only useful to the extent it is less than actual depreciation. And that doesn't necessarily happen with the types of properties you are talking about. (People chasing deductible depreciation usually look for older, larger, wooden homes, not tiny brand-new apartments.)

If you look around the BRI website, for example, you will see many references to real estate being "safer than the stock market" and offering "long-term security", etc. There are one or two mentions of possible income tax savings, but they do not appear to be the main selling point, and that would be for good reason.

If you are inclined to buy a small new apartment in Tokyo for other reasons (e.g., because you think it will appreciate in value, or you think it offers a better risk/return ratio than your other investment options), then the potential income tax savings are a nice-to-have. But they are absolutely not the primary reason to make this kind of investment. They just aren't significant enough and rely on too many variables falling into place.

if I’m also already taxed back home.

If you are a UK citizen, keep in mind that you are still entitled to a personal allowance as a non-resident (see here). So if your rental income is less than £12,570 per year (the current personal allowance), you shouldn't be paying any UK tax on it. In that scenario, you don't have to worry about foreign tax credits. You just declare it on your Japanese tax return as rental income.

If you are not a UK citizen or the rental income is more than £12,570 per year, you will need to claim a foreign tax credit on your Japanese tax return with respect to the UK tax you paid on the rental income. There is a complete guide to Japan's foreign tax credit here. In the case of foreign rental income, it's not too complicated.

Your biggest challenges will probably be (1) determining the value of the land separately from the building (this is required by Japanese tax law) and (2) accounting for the depreciation of the building (Japan's depreciation rules don't always map nicely onto foreign buildings). But there are lots of past threads in this sub on these topics. So you might want to start by reading some of those.

It was for blogging/social media/affiliate income so I think that would be misc (business) income, is that right?

It depends on the scale of your operation. But given the amounts you are describing, it doesn't sound like you are operating on the scale of a full-fledged business. In which case, miscellaneous (business) income would be correct.

means both conditions need to be fulfilled at the same time?

No. It just means those are the two ways for the capital gains to qualify for remittance-based taxation. Only one of the two things needs to be true. (In fact there is a third possible way to qualify—hold the stock for at least 10 years—but as yet it's impossible for a stock purchased after April 1, 2017 to have been held for 10 years.)

if I bought after April 1, 2017 but before moving to Japan, any resulting gains are still treated as Japan sourced?

No, if you bought the stock before moving to Japan, the April 1, 2017 deadline is irrelevant to you.

If you bought the stock before moving to Japan, capital gains derived from a sale (made during your first five years in Japan) will be subject to remittance-based taxation.

That's why the April 1, 2017 deadline is effectively irrelevant at this point. It could only affect someone who was living in Japan prior to April 1, 2017 but who has not lived in Japan for five years yet.

Even in years like 2023, or 2024?

No. I think u/tsian was overlooking the ways in which the basic deduction has changed over the last few years. As you can see from the chart on this NTA page, the basic deduction is 104万円 this year (2026). But last year it was 95万円 (for the lowest income earners) and until 2024 it was only 48万円.

So the threshold for filing was a lot lower in the past, and you may have had an income tax return filing obligation.

I am not registered as a sole proprietor.

Just to clarify: Japan does not have a registration system for sole proprietors. u/tsian was likely referring to the process of notifying the NTA that you have started generating "business income". But there are no penalties for failing to submit that notification.

Self-employment/freelance income is always either "business income" or "miscellaneous (business) income". You can read about the distinction in detail here. But given your lack of formal bookkeeping processes and the small amounts of money involved, I think it would make more sense for you to declare the income as "miscellaneous (business) income", which would mean you had no formal recordkeeping obligations.

Declaring "miscellaneous (business) income" is extremely simple. You just put your total revenue for the year in one box and your total expenses for the year in the other box. You don't need to itemize or prove anything.

u/AbekobetaHawawa's explanation is accurate. There is not really any such thing as "combining" or "not combining" the two pensions.

The CPP has no minimum contribution period (i.e., one contribution is enough to qualify), so there is nothing stopping you from applying to receive a CPP benefit. Canada will withhold Canadian income tax (25%, not 40%), but you can claim that amount as a credit on your Japanese tax return. And 75% of something is better than 0%.

Receiving a CPP benefit will not affect your Japanese pension benefit. (Though you will need to declare the CPP benefit on your Japanese tax return.)

There are three reasons a country can tax your income: because you live there, because the income is sourced there, or because you are a citizen (rare, but applicable to the US).

Only one country can tax you because you live there. If any other country is going to tax you, it must be because your income is sourced there or you are a citizen.

Inheritance and gifts are different, though. Inheritance/gift tax treaties are rare (as I said, Japan only has one such treaty), which means it is possible to be a tax resident of multiple countries for inheritance and gift tax purposes.

It would depend on the total value of your estate, and you would have to do the math, but the applicable general principles would be:

• to the extent your heirs will not be Japanese tax residents at the time of any future sale, it would probably be advantageous to leave them unrealized gains;
• compounding means that it is advantageous to pay income tax as late as possible (to the extent the rate would be the same, which is the case for Japanese tax residents selling securities);
• to the extent you expect your heirs to owe a significant rate of Japanese inheritance tax, it would likely be beneficial to realize the gains before your death and reduce their inheritance tax burden.

I believe I have to pay or at least file for remittance tax here in Japan.

Japan does not tax remittances. There is no such thing as "remittance tax".

What you are presumably referring to is the fact that your UK-source income may be eligible for remittance-based taxation. (If you explain more about the kind of income you have, people can confirm this. You should also refer to this section of the wiki, which summarizes the division of taxation rights between the UK and Japan under the current treaty.)

How do I go about finding a tax accountant that can help file for 2026 in this area please (ideally familiar with UK taxation)?

Unless you are running a cross-border business, it's unlikely that you need professional assistance to file a Japanese tax return. The relevant forms are quite simple and can largely be completed online. This sub hosts a Tax Return Questions Thread during filing season each year, which should provide all the information you need.

I’m not classified as that because I am an Australian under a working holiday

I don't really understand what you are referring to here. Your nationality is not important. Your visa is not especially important.

Some Australians on working-holiday visas are non-residents and are therefore subject to the flat 20.42% rate. Some Australians on working-holiday visas are residents and are therefore subject to the "kōran" rate. Your employer has responsibility for determining the applicable rate and withholding appropriately.

From what you have said, it is clear that your employer determined you are a resident of Japan for tax purposes (i.e., your 住所/domicile is in Japan) and therefore subject to the "kōran" rate. Are you sure your employer is wrong? Are you on the resident register? If you told your municipality your domicile is in Japan, it's not surprising for your employer to follow suit.