The following is based on an article first published in a newsletter by the Roppongi Bar Association, an organization for foreign lawyers in Japan.
ADVICE FOR INTERNATIONAL ASSIGNEES TO JAPAN
Undertaking an international assignment to Japan can be extremely rewarding.
However, you will be subject to requirements that you may not ordinarily face in your home country. This is particularly true on the visa and tax front.
The following is a list of some simple but KEY things you should do if you accept a work assignment to Japan.
1. Maintain Your ORIGINAL Educational Certificates
Many countries (including Japan) may require that you produce your ORIGINAL education certificates and other qualifications in order to obtain a visa.
If you are not sure where these documents are, contact your university NOW to obtain replacements. This process may take several months and should be done before an urgent need arises. If the institution has merged (or worse) gone out of business, this process can be even more time consuming. Furthermore, universities may not have information stored digitally for pre-1990 graduates.
2. Work References
For every job you have held, obtain a letter certifying the dates of your employment and outlining your duties. If possible obtain multiple originals.
This can be important for certain visas (you may need to prove a certain level of experience) and may also be relevant for tax purposes.
3. Track Your Time
Maintain an excel spreadsheet that notes where you are each day. If you travel internationally, record the flight number and keep a copy of the boarding pass. This can be vital for tax purposes.
4. Keep Copies of ALL Immigration Applications
It is vital that you keep a copy of all immigration applications submitted on your behalf. It can be a major issue when applications submitted years in the future are inconsistent with earlier ones.
5. Keep Copies of Old Passports
Passports serve as a record proving where you were at a given time. This can be important to resolve tax issues and even to assist in obtaining a driving license in some countries.
6. Keep Copies of ALL Tax Submissions
If you are working with a CPA outside your home country, insist that you receive scanned copies of all submissions (tax filings, tax returns, tax agent agreements, breaking residence, etc.) that are submitted on your behalf.
7. Be Careful Transferring Money
In some countries you will only be taxed on money sourced in that country. However, you may also be subject to a tax on money that is brought into the country from outside.
If you transfer cash to your new home it may be subject to tax.
8. Download Your Bank Statements
Ensure that you keep copies of all of your banks statements. Note that many banks only keep copies of statements online for 12 months or less. If you don’t maintain copies it will require a significant investment of time and expense (not to mention aggravation) to obtain missing statements that could have been easily downloaded.
9. United States Citizens and Green Card Holders
U.S. Citizens or those with a green card need to clearly understand their U.S. tax and other compliance obligations.
The U.S. tax regime gets a lot a bad press. In reality, the requirements are not particularly difficult to meet -- essentially a tax return and some additional information reporting. It is vitally important to be compliant from Day 1. Once filings are missed, the risk of being subject to (onerous) penalties kicks in.
If you are a U.S. expatriate you need to work with a knowledgeable U.S. CPA – this means someone with extensive experience dealing with U.S. expats. That person needs to be engaged BEFORE you start your overseas assignment.
10. Understand Your Tax Situation in Your New Country
It can be hard to keep things straight when you are in the middle of dealing with a move to a new position in a new country.
However, the basics you should understand are the following:
- When is tax compliance due?
- What is the scope of income that will be taxed?
- What benefits are available to reduce your tax?
If you follow the above advice you minimize the chances of bad (tax and visa) things happening in Japan and you will avoid wasting large amounts of time.
The key to a successful international assignment is organization!!!