foreign earned income as permanent resident visa

[onyourmark2021]

If someone with a permanent resident visa, moves to another country (China), to work for 10 months, and receives income there, paid into a Chinese bank account, is that income fully taxable in Japan?

[Tkydon]

Permanent Resident Visa (For Immigration) and Permanent Resident For Tax Purposes are different and separate.

Before you left for China, did you inform your Municipal Office that you were leaving for a period of time?

Did you de-register from your former residence?

Did you maintain a residence for you and your family during the time you were away?

Did you continue to pay your Residents' Taxes for the previous year?

Did you get a Re-Entry Permit from Immigration, or did you use the Special Re-Entry Permit Tick-Box on the Disembarkation Card?

Did you appoint a Tax Representative to deal with taxes while you were away?

As a Permanent Resident For Tax Purposes, having been in Japan for more than 5 years in the last 10 years, and away for a short period (less than a full tax year), and especially if you maintained a residence for yourself and your family while you were away, it would be very difficult for you to argue that you broke your Residence / Domicile for the period you were away, and therefore the Tax Agency may consider the income in China to be taxable in Japan in the Tax Year in which it was earned.

You would have to consult with a professional, and with the Tax Office when you do your Tax Return.


If you were not registered as being Resident in any Municipality on 1 Jan 2021, then you would not be liable for Residents' Taxes on 2020 Income, which would be payable between July 2021 and June 2022.
If you were not registered as being Resident in any Municipality on 1 Jan 2022, then you would not be liable for Residents' Taxes on 2021 Income, which would be payable between July 2022 and June 2023.
And so on.
But Residents' Taxes are paid in arrears, so you would have probably had to pay the outstanding Residents' Taxes, or have settled the outstanding Residents' Taxes before leaving for China.

You would be liable for National Taxes on income in the same tax year before leaving for China, and maybe on China Sourced Income if the Tax Agency still considers you Domiciled in Japan with no break in Tax Residency.
You will be liable for National Taxes on income in the same tax year as you return to Japan from China.

Unlike the US, Japan does not consider Days in Year spent out of country, and so if that 10 month period spanned two Tax Years, and you did not have a break in your residency for a full Tax Year, they may consider that you did not break your Domicile, and are therefore still liable for Global Tax. A lot will depend on whether you followed all the correct procedures before you left Japan, and whether you can argue your break in Domicile and Tax Residency during that time.

You would need to consult a professional and the people at the Tax Office.

I'm afraid you probably will be liable for Taxes for the period you were in China.

[captainspoke]

Not a direct answer, but I don't think china is part of the global info-sharing network among countries/banks. Whatever you might save from 10 months' of work there could probably be converted to one or another foreign currency (cash) and carried away in a money belt.

[Tkydon]

Not a direct answer, but I don't think china is part of the global info-sharing network among countries/banks. Whatever you might save from 10 months' of work there could probably be converted to one or another foreign currency (cash) and carried away in a money belt.

But you should note that you should declare if you are carrying more than Y1M in Cash and Financial Instruments on your Customs Declaration Form...

And if you decide to deposit a large amount of cash into a Bank in Japan, they will ask for details of the source of funds...

[captainspoke]

If someone with a permanent resident visa, moves to another country (China), to work for 10 months, and receives income there, paid into a Chinese bank account, is that income fully taxable in Japan?

Pre-retirement, I was interested in and explored getting a uni teaching job in china (this was pre-pandemic). The idea was that it would be a good way to travel/see china (I once worked there long ago), while being able to live in a place for a while and travel--during the lunar new year and then after finishing the year/contract. Uni in china don't pay much, but also have light work schedules. Probably some savings along the way, but that would've become a travel budget (mad money), not savings in the sense of investment.

The immediate problem with that was a fairly strict age threshold there for working visas (a Z-visa if memory serves). 60yrs old, and I was already beyond that--and once anyone got that bit of info, I was ghosted. At the time, I read that even people approaching 60 (say, 55 and above) were like kryptonite. Some folks did say that with good connections ('guanxi'), there could be exceptions, and my uni here did have links with (and large numbers of exchange students from) several chinese uni. I didn't pursue it.