RetireJapan

Hi all,

I just retired as employee of a large US multinational.
As part of the plan to fill in my post-retirement time, I may provide consulting services to my previous employer,

I understand from various earlier forum "conversations" that I can simply do this as 個人事業.
Apparently, there is no need to setup a company or actually register as 個人事業, but just report the income from the consulting services in the right section of the income tax form. I am totally fine with handling the accounting, but I am not clear yet about how this all goes into the personal income tax form. For instance, will I have to record the consulting income at the moment of billing (I assume) or at the moment of getting the money paid into my account? Normally, for employment income, it is based on when the money gets paid to you, so for consulting income that may be different.

Since, I will be charging my services (my hours * rate) in either USD or EUR, I also have to deal with the exchange rate in my income, as there is likely to be a difference between the rate at the time of charging and the rate at the time of getting the money paid. The accounting is not a problem, but I just wonder whether this needs to be handled in a specific way if you are doing business as 個人事業 (I assume the same way as when you are a real company).

I wonder also if I have to charge consumption tax on consulting services (my hours * rate) to a company in Belgium or the US. Maybe depending on if this considered export of such services or if it is deemed to have taken place in Japan.

If things go as planned, I may exceed 10 million JPY per year. So, if this service to a foreign company, in principle, has to include consumption tax, should I simply assume that the 10M will be exceeded and add this to my invoice? I don't want to risk having to pay 10% CT to the authorities and lose this money from my income.

I know there are several topics on similar topics, but I couldn't find the right answers and also still need to setup time to talk with the tax authorities here in Ichikawa city.

Any insight or suggestions are appreciated.

Regards,

Hans

I've been doing this for a couple of years so think I can help.

You need to record the income twice. Once when the sale is made or invoice is issued. And once when they money enters your bank.

You're right that this could lead to a profit or loss depending on rate changes which you also need to record as income or expense.

It can be a pain at the start but when you get used to it, it's not so bad.

I recommend using some software to help with everything. I use Freee but heard Money Forward is good too.

As for consumption tax, cos your clients are overseas you don't need to pay. Even if you go over 10 million.

About registering, you don't need to register.as a sole proprietor. But I believe you need to pre register for the blue tax filing form (青色申告). This gets you a decent tax deduction so is worth doing.