Title: Taxation of Salary of Foreign Director Working at a Company in Japan

Question: A director from our parent company overseas is going to work at our company in Japan for about a year. If their salary is paid by the parent company to their overseas bank account and not transferred to Japan, there is no need to withhold and pay salary tax in Japan, right?

Answer: When paying salary, etc to a foreign person, it’s important to consider their resident status under Japanese tax law.

          If a person intends to live in Japan for more than a year, then they are considered a resident. There are two different types of resident – non-permanent and permanent resident. Non-permanent resident is defined by Japanese tax law as anyone who has lived in Japan for less than 5 years. Permanent resident is defined as anyone who has lived in Japan for more than 5 years.
          Per Japanese tax law, non-permanent residents are taxed on their domestic income earned in Japan and income earned abroad that is remitted to Japan. Permanent residents are taxed on their worldwide income.
          In the case of this question, the “place of services provided” is Japan and therefore even if the salary is paid overseas and deposited in an overseas bank account, it is considered domestic source income.
          This means that the director’s salary should be taxed. Normally tax would be withheld from the salary at the time of payment, but since it is being paid overseas and therefore the Japanese entity cannot withhold taxes, the director will have to file an individual tax return in Japan, where they must report their income and pay any applicable tax.

          For more information about resident and non-resident taxation see our other post here: https://toma.co.jp/blog/jtg/resident-status-tax-treatment/.　
At TOMA Consultants Group, our international tax experts can help you with all of your international taxation needs and questions. For more details, please feel free to contact TOMA Consultants Group.

 TOMA Consultants Group English Site      ⇒　http://toma.co.jp/en/

タイトル：内国法人の外国人役員報酬に対する課税

Question: 当社は国外に親会社がある日本の法人で、親会社から外国人役員を1年程度受け入れることになっています。役員報酬は、親会社から全額、海外の本人の口座に振り込まれる予定です。日本に給与を送金しない限り国内源泉所得にはならず、課税の必要はないのでしょうか。

Answer: 外国人への報酬が発生した場合は、まず居住形態により所得の課税範囲を確認します。

   日本に１年以上住むのであれば居住者となります。
   さらに、居住者は日本に居住した日から5年以内の「非永住者」と5年を経過した「永住者」に区分されます。
   非永住者の場合、国内源泉所得及び国内に送金した国外源泉所得に課税されます。永住者の場合、全世界の所得に課税されます。
   ご質問の場合、役務の提供地は日本になりますので、本社から支払われている報酬は例え日本国内で振り込まれなくても「国内源泉所得」となり、課税されます。本来は日本国内で支払時に源泉徴収しますが、親会社が海外の口座へ直接振り込む為、日本法人は源泉徴収を行えません。この場合、外国人役員は日本で自ら確定申告を行い、納税をすることになります。

   居住者・非居住者について、詳しくはこちらをチェックしてください：https://toma.co.jp/blog/jtg/resident-status-tax-treatment/）

TOMAコンサルタンツグループは国際税務、出向者、国際源泉所得等について相談を承ります。

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