10% tax withholding for translators based outside japan

[usha jayaraman]

Hello everyone,

Is there any law that says a Japanese client cannot
withhold 10% tax on payments to offshore translators?
I mean, if a client insists on tax deduction at source,
is there any way the offshore translator can explain
to the client why this is not right?

I would really appreciate any info on this anyone has.

Thanks a lot,

Usha Jayaraman

[Canuck in Japan]

Hi Usha,

This issue has been discussed in the past on this list.
If you take a look through the numerous threads in the archives, you may
find some helpful information.

http://honyaku-archive.org/

- Dan in Yokohama

-----------------------
Dan Burgess
canuck....@gmail.com

> --
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> Posters assume all responsibility for their posts; list owners do not
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[Jean-Christophe Helary]

Le 16 nov. 2009 à 20:11, usha jayaraman a écrit :

> Is there any law that says a Japanese client cannot
> withhold 10% tax on payments to offshore translators?
> I mean, if a client insists on tax deduction at source,
> is there any way the offshore translator can explain
> to the client why this is not right?

Accourding to my accountant, the law says that tax deduction at source is compulsory, and that in the case of offshore translators the tax is 20%.

http://www.taxac.jp/tazoe/pdf/009.pdf

There is nothing "not right" about that.






Jean-Christophe Helary

[Nora Stevens Heath]

Jean-Christophe Helary writes:

> Accourding to my accountant, the law says that tax deduction at source
> is compulsory, and that in the case of offshore translators the tax is
> 20%.

I have about ten clients in Japan who need to be "enlightened", then. I
have never been charged tax on my translations because the IRS takes
care of that Stateside. Two clients have required me to sign official
paperwork swearing that I pay taxes in my home country and thus am free
from paying any in Japan, but otherwise: no taxes, nohow.

Nora

--
Nora Stevens Heath <no...@fumizuki.com>
J-E translations: http://www.fumizuki.com/

[Jean-Christophe Helary]

Le 16 nov. 2009 à 22:47, Nora Stevens Heath a écrit :

> Jean-Christophe Helary writes:
>
>> Accourding to my accountant, the law says that tax deduction at source
>> is compulsory, and that in the case of offshore translators the tax is
>> 20%.
>
> I have about ten clients in Japan who need to be "enlightened", then.

Maybe they should get a Mac ?

> I have never been charged tax on my translations because the IRS takes
> care of that Stateside.

That's a totally different issue.

If one of your client wanted to withdraw 20% from your payments they'd have the law with them.

I think that's the issue of the OP.

There is nothing in the current state of the law that makes legal what you describe below.

> Two clients have required me to sign official paperwork swearing that I pay taxes in my home country and thus am free from paying any in Japan,

That's because the tax office does not want to fill tons of papers for stuff that can be dealt with otherwise, but that sure is not what the law says.




Jean-Christophe Helary (JA/EN > FR)
------------------------------------
http://mac4translators.blogspot.com/
http://twitter.com/brandelune
http://www.doublet.jp

[Richard Thieme]

----- Original Message -----
From: "Jean-Christophe Helary" <jean.christ...@gmail.com>
To: <hon...@googlegroups.com>
Sent: Monday, November 16, 2009 8:35 PM
Subject: Re: 10% tax withholding for translators based outside japan



Le 16 nov. 2009 ・20:11, usha jayaraman a 馗rit :

> Is there any law that says a Japanese client cannot
> withhold 10% tax on payments to offshore translators?
> I mean, if a client insists on tax deduction at source,
> is there any way the offshore translator can explain
> to the client why this is not right?

Accourding to my accountant, the law says that tax deduction at source is
compulsory, and that in the case of offshore translators the tax is 20%.

http://www.taxac.jp/tazoe/pdf/009.pdf

There is nothing "not right" about that.

\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\

Hmm. I beg to differ. Nothing on that document you state discusses work
performed overseas by someone resident overseas.

Anyway, the answer I have been able to get from the Kawasaki-kita tax office
differs.

According to them, if the supplier is overseas, does the work overseas, and
the work is not related to royalty income, then it is not domestic source
income, and I don't have to withhold taxes.

Been doing it that way for more than 10 years now.

Regards,

Richard Thieme

[Jean-Christophe Helary]

Le 16 nov. 2009 à 22:58, Richard Thieme a écrit :

> Anyway, the answer I have been able to get from the Kawasaki-kita tax office
> differs.
>
> According to them, if the supplier is overseas, does the work overseas, and
> the work is not related to royalty income, then it is not domestic source
> income, and I don't have to withhold taxes.

Good to know. I need to get my accountant a Mac then...

[Richard Bergovoy]

I believe that in the absence of a tax treaty between Japan and a
translator's home state, Japan does claim the right to tax income
earned by translators outside Japan and to require withholding at
source.

But there is no doubt that Article 7 of the 2003 US-Japan Tax Treaty
http://www.ustreas.gov/press/releases/reports/conventionfinal.pdf
permits taxation only by the home state of an "enterprise" that
performs all of its work in the home state and does not maintain a
permanent office in the client state. "Enterprise" includes service-
based independent contractors. http://www.irs.gov/pub/irs-trty/japante04.pdf
at pgs. 9-10.

So if you are a US-resident translator, tax withholding should not be
done, although the agency may require proof (as several posters have
noted) that the translator truly is foreign-resident.

My guess is that Japan probably has similar tax treaties with most
developed countries.


Best regards,
Richard Bergovoy

[Chika Kamiya]

税金問題でお悩みの皆様へ

日本の税務署に聞くと色々教えてくれますよ。一定した筋の通った回答を得られます。青色申告会でも、外資企業の多い港区とか渋谷区とかがねらい目。会員じゃなくても結構親切に教えてもらえます。日米租税協約のことももちろん詳しく教えてくれます。それか、日米あるいは国際の税務申告を扱っている現地CPAなどにお尋ねになると良いでしょう。申し訳ありませんが、米国内の税務担当官は当てにならないというのが、経験上の実感です。そうじゃない地域ももちろんあるんでしょうが．．．1年の滞在期間の税金はアメリカで申告しなくて良いと言う担当官がいたり、とんでもない金額を言う担当官がいたり、もう、問い合わせするたびめちゃくちゃな回答しか得られず．．．。まぁ、これは愚痴ですけど。

〒100-8102 千代田区大手町 1-3-3 電話番号03-3216-6811(代表)
日米租税協約と10%の源泉徴収について聞きたい、と仰れば担当官に回してくれます。


Chika

[kanji saito]

>Hmm. I beg to differ. Nothing on that document you state discusses work
>performed overseas by someone resident overseas.

日本国内の翻訳会社が非居住者（resident overseas）に依頼して行われた翻訳
に対しても、日本国内の翻訳会社は源泉徴収をする義務があります。
http://www.nta.go.jp/shiraberu/zeiho-kaishaku/shitsugi/gensen/06/06.htm

ただし、日本と翻訳者の住んでいる国の間に租税条約があれば、その条約に応じ
て源泉徴収率が変わります。

斉藤　完治

[Minoru Mochizuki]

I believe that tax withholding is a rule applied to a service provider (seller) who is a resident of Japan.

If you can prove to your client that you are not a resident of Japan, you are not a legal tax payer in Japan so that your client (buyer) has no legal ground to apply the withholding rule.

 

Minoru Mochizuki

[Gururaj Rao]

Usha,
Where are you based?

In case you are based in India, a double taxation prevention treaty
exists between Japan and India.
See this URL:
http://www.worldwide-tax.com/india/ind_double.asp

You probably need to send this URL to the client, and may need to show
some proof that you are a resident of India, I guess.

If you are a resident of some other country, ignore the above.

Gururaj

On Mon, 16 Nov 2009 20:11:21 +0900
usha jayaraman <usha.je...@gmail.com> wrote:

--
honya...@gmail.com
Website: http://members.jcom.home.ne.jp/transtech/
Blog: Translator's Tools: http://honyakusha.blogspot.com/

[christopher blakeslee]

On Mon, Nov 16, 2009 at 2:52 PM, Minoru Mochizuki <min...@rhythm.ocn.ne.jp> wrote:

I believe that tax withholding is a rule applied to a service provider (seller) who is a resident of Japan.

If you can prove to your client that you are not a resident of Japan, you are not a legal tax payer in Japan so that your client (buyer) has no legal ground to apply the withholding rule.

This is true for residents of countries with a tax treaty. The one exception to this is royalties, and that is where all the confusion on the part of Japanese accountants, certain clueless tax offices, and others, begins. It is important to establish that the translator does not own the copyright, and that the payment is not a royalty payment. J K Rowland pays serious income taxes to Japan (and to the US and to other countries that allow her to sell her books) despite not living there, because her income is from royalties. She doesn't have to file a tax return in all those countries because the tax is just withheld at the source (by the licensee). So the withholding is really a convenience for billionaire authoresses, but creates potential problems for translators who are just paid by the word rather than a royalty.

[kanji saito]

日本とインドの間で二重課税を防ぐための租税条約は結ばれています。
が、だからといって源泉徴収が0%になるわけではないと思います。
http://www.nta.go.jp/shiraberu/ippanjoho/pamph/pdf/5117.pdf

上記によれば、10％の源泉徴収ということになっています。

斉藤　完治

[Gururaj Rao]

On Tue, 17 Nov 2009 11:39:37 +1300
kanji saito <in...@troutbum.co.nz> wrote:

> 日本とインドの間で二重課税を防ぐための租税条約は結ばれています。
> が、だからといって源泉徴収が0%になるわけではないと思います。
> http://www.nta.go.jp/shiraberu/ippanjoho/pamph/pdf/5117.pdf
>
> 上記によれば、10％の源泉徴収ということになっています。

Saito-san,
Thanks for the URL.

So that would mean that the client in Japan can withhold 10%?
I'm not very sure on how all this works. Since the overseas user cannot
file tax returns in Japan, how does he/she recover the 10% or part thereof?


Regards,
Gururaj

[Peter Clark]

この資料は投資家向きなので、直接関係ないと思います。
 
> http://www.nta.go.jp/shiraberu/ippanjoho/pamph/pdf/5117.pdf

「租税条約 締結国」　で調べれば、OPが住んでいる国とどういう条約になっているかが分かります。
 
ピーター・クラーク
オーストラリア在住、「租 税 条 約 に 関 す る 届 出 書」届き出済み

---

Head to the Daily Blob on Windows Live For more of what happens online

[Roland Hechtenberg]

Jean-Christophe Helary wrote:

> If one of your client wanted to withdraw 20% from your payments they'd have the law with them.
>

Unless there is a treaty between the two countries.

Have fun (and tax treaties),

Roland Hechtenberg

[Richard Thieme]

----- Original Message -----
From: "kanji saito" <in...@troutbum.co.nz>
To: <hon...@googlegroups.com>
Sent: Tuesday, November 17, 2009 4:02 AM
Subject: Re: 10% tax withholding for translators based outside japan

> >Hmm. I beg to differ. Nothing on that document you state discusses work
>>performed overseas by someone resident overseas.
>
> 日本国内の翻訳会社が非居住者（resident overseas）に依頼して行われた翻訳
> に対しても、日本国内の翻訳会社は源泉徴収をする義務があります。
> http://www.nta.go.jp/shiraberu/zeiho-kaishaku/shitsugi/gensen/06/06.htm
>
> ただし、日本と翻訳者の住んでいる国の間に租税条約があれば、その条約に応じ
> て源泉徴収率が変わります。
>
> 斉藤　完治

That is the royalty problem. The text specifically addresses 「論文(原著作物)を翻訳した場合には」

I also mentioned this in my post. Most of what we do does not constitute a
著作物 under Japanese copyright law.

Some things do. In those rare cases, withholding applies.

Regards,

Richard Thieme

[Richard Thieme]

----- Original Message -----
From: "kanji saito" <in...@troutbum.co.nz>
To: <hon...@googlegroups.com>
Sent: Tuesday, November 17, 2009 7:39 AM
Subject: Re: 10% tax withholding for translators based outside japan

> 日本とインドの間で二重課税を防ぐための租税条約は結ばれています。
> が、だからといって源泉徴収が0%になるわけではないと思います。
> http://www.nta.go.jp/shiraberu/ippanjoho/pamph/pdf/5117.pdf
>
> 上記によれば、10％の源泉徴収ということになっています。
>

それも著作物の権利譲渡に対する対価の源泉徴収ですよ。
われわれの実務翻訳者は、ごく一部を例外はありますが、著作物とならない資料を訳する仕事が殆どです。

Regards,

Richard Thieme

[Malcolm James]

Kanji Saito wrote:

> 日本国内の翻訳会社が非居住者（resident overseas）に依頼して行われた翻訳
> に対しても、日本国内の翻訳会社は源泉徴収をする義務があります。
> http://www.nta.go.jp/shiraberu/zeiho-kaishaku/shitsugi/gensen/06/06.htm

That example is problematic for many reasons, including the fact that it
doesn't make clear that withholding isn't applicable to work for hire of the
sort that most commercial translators are doing. With most commercial
translation work, the contractual relationship between the translator and
translation customer is one of 業務/役務提供, but this example describes a
situation where there is a different contractual relationship ("買取りの契約になっています"）. Here's what the same site has to say about work for hire:

日本の企業が国外で非居住者等から役務の提供を受けた場合の対価については、国内源泉所得には該当しません。
http://www.nta.go.jp/shiraberu/ippanjoho/pamph/gensen/aramashi2007/mokuji/10/01.htm


In the end it comes down to whether the translator is generating royalties
or providing a service. If the translator is just providing a service,
neither withholding tax nor tax treaties are relevant. If the translator is
generating royalties, tax treaties can be used to address the withholding
obligation.

So how do you tell whether the translator is providing a service or
generating royalties? Start by looking at the contractual relationship
between the translator and the customer. The answer is obvious in many
cases, but in complex cases the discussion can get pretty convoluted.
Without going into too many details, it's useful to look at what the
Copyright Act has to say about the situation:
--------------------
著作権法第15条第1項ご参照：　「（職務上作成する著作物の著作者）
第十五条 　法人その他使用者（以下この条において「法人等」という。）の発意に基づきその法人等の業務に従事する者が職務上作成する著作物（プログラムの著作物を除く。）で、その法人等が自己の著作の名義の下に公表するものの著作者は、その作成の時における契約、勤務規則その他に別段の定めがない限り、その法人等とする。」
--------------------
This means that even when we're talking about a translation that eventually
ends up in a publication, if the translation customer (法人等) publishes the
translation under its own name (法人等が自己の著作の名義の下に公表する),
rather than under the translator's name, the copyright belongs to the
translation customer (著作者は...その法人等とする), not to the translator,
unless there is an agreement to the contrary. In this situation, the
translator is not selling the copyright to the translation; he/she never had
copyright in the first place. Consequently, no royalties are payable, so
he/she is providing a translation service.

The NTA site is confusing, and local tax offices are not specialists in this
area. As a result, there is a risk that they will take a simplistic
interpretation of the example that Kanji posted and jump to incorrect
conclusions. However, in all the cases I've experienced, a properly-reasoned
explanation results in the tax office accepting that withholding tax is not
necessary for overseas translators providing commercial translation
services.

HTH

Malcolm
________________________________________________
Malcolm James
Fontaine Limited, Kyoto
Japanese to English translation by native speakers
web: http://www.translation.co.jp

[kanji saito]

なるほど。
Thank you for enlightening me.

斉藤　完治

[martha mcclintock]

this is all very timely. I am now months into a discussion with a new-
old client (haven't done work for them for years) with a new
accountant in office who is freaking out about me being in Australia
and asking for no withholding. It has gone on for months, they can't
figure it out, supposedly are finally discussing it with my japanese
accountant.....

And they still haven't paid me for my July work for them...

So i have just sent Malcolm's comments below to my handler there, to
see if that makes sense. All the rest of my clients seem to figure it
out. Some need the Application FOrm for Income Tax Convention sent to
them every payment, some once a year, and some don't need it at
all.... Some withhold, some don't and now that Jpn-Australia have a 5%
withholding level, things got even more confusing to some clients...

And to make matters worse, it all depends which tax office you speak
with. They ALL give different interpretations on the idea of an
overseas translator with no royalties......

I am hoping this additional information from Malcolm will help my
client!

Good luck to all, and to all, stick to your guns... we are not getting
royalties, we are being paid fee-for-service, we pay taxes in our
resident countries, and to me it is just a money grab by the Japanese
tax office....

grins
Martha McClintock

[Fred Uleman]

Would it help if we changed the way we billed?
For example, instead of charging for the translation, we sell the copyright to this derivative work that we have created (based upon a source text that the client provided). That is not royalties. We are _selling_ the copyright. And in so doing, we are explicitly renouncing any and all claim to royalties.

And even if it would help, is this possible?

Just thinking out loud,
-- -- -- -- -- -- --
Fred Uleman

[Richard Thieme]

----- Original Message -----
From: "Fred Uleman" <ful...@gmail.com>
To: <hon...@googlegroups.com>

Sent: Tuesday, November 17, 2009 4:42 PM
Subject: Re: 10% tax withholding for translators based outside japan

> Would it help if we changed the way we billed?
> For example, instead of charging for the translation, we sell the
> copyright
> to this derivative work that we have created (based upon a source text
> that
> the client provided). That is not royalties. We are _selling_ the
> copyright.
> And in so doing, we are explicitly renouncing any and all claim to
> royalties.
>

That is actually the example that Mr. Saito cited. Which talks about その著作物の権利の譲渡の対価

and stipulates that taxes are to be withheld.

Regards,

Richard Thieme

[Minoru Mochizuki]

It is unfortunate that the paying parties in Japan often sound like they are
petty tax collectors.
They don't seem to realize that they are simply helping the tax office they
hate so much by withholding taxes from their service providers (poor
translators). What they collect from translators are not their money, of
course. Then why they are so zealous, I don't know. They even try to collect
when they are not suppose to.

Minoru Mochizuki

-----Original Message-----
From: martha mcclintock [mailto:mjm...@gmail.com]
Sent: Tuesday, November 17, 2009 3:49 PM
To: hon...@googlegroups.com
Subject: Re: 10% tax withholding for translators based outside japan

[Patrick Donelan]

I know the answer to this one, from prior experience (in a different
context, not related to provision of translation services). They (all
companies) are required by law to withhold tax that the law requires them
to. If they don't, they will be fined and the tax will have to be paid, if
a tax inspector finds out that they have not done so. Therefore it is best
to do it all according to the tax law in the first place.

Regards

Patrick Donelan
Japanese to English Technical Translation
Quezon City, Philippines

[B. Hyman]

On Tue, 17 Nov 2009 17:00:19 +0900
"Minoru Mochizuki" <min...@rhythm.ocn.ne.jp> wrote:

> It is unfortunate that the paying parties in Japan often sound like they are
> petty tax collectors.
> They don't seem to realize that they are simply helping the tax office they
> hate so much by withholding taxes from their service providers (poor
> translators). What they collect from translators are not their money, of
> course. Then why they are so zealous, I don't know. They even try to collect
> when they are not suppose to.

My company doesn't withhold from those resident outside of Japan, and we
had no problems with our tax audit in June of this year.


We do withhold 10% from any payments for translation work performed by
people resident in Japan. Why? Because any payments we make to such
translators are considered to be the 90% left after the 10% is withheld,
and we are obligated to pay that to the friendly tax people.

For example, if the payment is 100 yen, we pay the translator 90 yen and
the tax people 10 yen.


If we were to, for any reason, pay the full 100 yen to the translator,
we would still be obligated to pay the tax people their share. It is
likely that they would then want 11 yen as they would assume that the
total amount was 111 yen and we deducted 11 yen.

Any explanation that we hadn't deducted the tax would just dig us deeper
into a hole we don't want to go near.


We also deduct 10% when we pay lawyers and tax accountants.
It's the law.


---------------------------------------------
Brian Hyman
mli...@yokomoji.com
---------------------------------------------

[Makoto Sakamoto]

> Then why they are so zealous, I don't know. They even try to collect
> when they are not suppose to.

I have to agree on this notion, because I was told about a questionable act
committed by a shacho when he started out a shabby translation broker
(which is now well-established; no further details should be divulged here).

If you are living in Japan, why don't you establish your own company
and invoice your custmer/agency in the name of your company so that
you can legitimately get the full before-tax money, right?

As to corporate taxes on international trades, rather than those of an
individual, the following description may interest you:

QUOTE>-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=
However, taxpayers may consider that a moderate level of double taxation is an acceptable price to be paid in order to obtain relief from the necessity of complying with complex transfer pricing rules.
-- Source: Transfer Pricing Guidelines for Multinational Enterprises and Tax Administrations
=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-<UNQUOTE

----- Original Message -----
From: "Minoru Mochizuki" <min...@rhythm.ocn.ne.jp>

<eom>

[John Brannan]

I went through this whole thing a couple of years ago when one of my
clients in Japan was audited by the local tax office and ordered to
start deducting 10% from my payments. (None of my other clients in Japan
have to do this.)
I protested my innocence and even recruited the help of the Japanese
Embassy staff here in Canberra, who copied the relevant sections of the
Japanese tax law for me and agreed that there was absolutely no need for
me to pay tax in Japan.
My client presented this material to the tax officials to absolutely no
avail. The officials (perhaps to save face) would not back down and
simply upped the threat level on my client, who quite understandably
caved in and agreed to do what he was told. The end result is that I
simply claim Australian tax credits for the tax deducted in Japan and it
all works out in the end (particularly for my accountant ;-) ).

It seems that the bottom line, whatever the Japanese tax laws may say,
is that it's the local tax office that makes the rules, and unless the
client in Japan can somehow counter the pressure the tax office applies,
they just have to do what they're told.

HTH
John Brannan

Peter Clark wrote:
> この資料は投資家向きなので、直接関係ないと思います。
>
> > http://www.nta.go.jp/shiraberu/ippanjoho/pamph/pdf/5117.pdf
>
> 「租税条約 締結国」　で調べれば、OPが住んでいる国とどういう条約になっ
> ているかが分かります。
>
> ピーター・クラーク
> オーストラリア在住、「租 税 条 約 に 関 す る 届 出 書」届き出済み
>

> ------------------------------------------------------------------------

> Head to the Daily Blob on Windows Live For more of what happens online

> <http://windowslive.ninemsn.com.au/blog.aspx> --

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------------
Canberra, Australia
Email: john.b...@netspeed.com.au
Phone: (+612) 6258 6038 Fax: (+612) 6258 6238

[Minoru Mochizuki]

I would not bother establishing my own company just to be content with
earning additional 10%, because it is, after all, a portion of the amount I
have to pay as tax. If I allow my client to collect it as withholding tax, I
can deduct that amount from my tax due when I do tax filing next spring.
That's the idea of withholding. I am not against my clients withholding tax
now that I live in Japan. I objected their stupid attempts of tax
withholding when I was a US resident.

Minoru Mochizuki

-----Original Message-----
From: Makoto Sakamoto [mailto:saka...@e-mail.jp]
Sent: Tuesday, November 17, 2009 6:45 PM
To: hon...@googlegroups.com
Subject: Re: 10% tax withholding for translators based outside japan

[Jean-Christophe Helary]

On 17 nov. 2009, at 17:00, Minoru Mochizuki wrote:

> What they collect from translators are not their money, of
> course. Then why they are so zealous, I don't know. They even try to collect
> when they are not suppose to.

Because when the tax office checks their accounts it expects to be paid 10% of what the agency paid its translators ?




Jean-Christophe Helary

[Minoru Mochizuki]

I don't know the reason why translation agencies would do that (I don't
believe they are trying to cheat us translators). It maybe that they simply
do not understand the tax system and try to withhold 10% from everybody.

Minoru

-----Original Message-----
From: Jean-Christophe Helary [mailto:jean.christ...@gmail.com]
Sent: Tuesday, November 17, 2009 10:36 PM
To: hon...@googlegroups.com
Subject: Re: 10% tax withholding for translators based outside japan

[kanji saito]

数年前、私がお付き合いしていた会社（東京都中央区）からある日連絡があり、
「税務署の監査が入り、非居住者に対しても源泉徴収しなければならない」とき
つくお叱りを受けたとのことでした。その時点で既に支払われていたその年度内
の翻訳料に対しても源泉徴収分を支払わなければならない、と税務署より言われ
た、ということでした。
既に私に支払われていた分についてはその会社が代わって支払い、それ以降の翻
訳料金については私が住んでいるニュージーランドと日本の租税条約に基づき
20％（!）源泉徴収されることになりました。

特にこの会社を疑う理由も思い当たりませんので、税務署によっては非居住者の
翻訳料に対しても源泉徴収するべきと解釈しているところもあるのだと思います。

John Brannanさんの場合と同じく、源泉徴収された20％は既に支払った税金と
ニュージーランドの税務署でみなされ、その分、ニュージーランドで払う税金か
ら差し引かれましたので、余分に税金を払ったわけではありません。

ということでJohnさんの意見に禿同。

斉藤　完治

[Minoru Mochizuki]

The episode shown below is nothing but to prove that some of the taxation
officers in Japan are not knowledgeable enough.
I have a similar experience but with a different result.

I once told the client in Japan I was about to work for when I was living in
U.S. that they should not withhold 10% from the payment they are supposed to
pay me as I was reporting all the income including the annuity the Japanese
government pays me to the US-IRS and pay taxes in US. (I told my client that
even the Japanese government did not withhold any amount from the annuity
they paid me, of course.) The contact person of my client first resisted but
finally agreed to talk to their local tax office in Tokyo and conceded to me
later that the tax office officials told them that they were not liable to
do any withholding in my case as I was a nonresident of Japan. The client
paid me in the full amount I billed and I duly paid my federal tax to IRS I
owed to U.S. Withholding is just a convenience system for tax collection for
the Japanese taxation system. In essence, it neither increase nor decrease
your or the client's net income after tax.

Minoru Mochizuki

-----Original Message-----
From: kanji saito [mailto:in...@troutbum.co.nz]
Sent: Wednesday, November 18, 2009 3:40 AM
To: hon...@googlegroups.com
Subject: Re: 10% tax withholding for translators based outside japan

[Wally Moore]

I have several long-time agency clients in Japan that never deduct any
withholding from their payments to me but I have had a couple
prospective clients recently insist they must deduct.

I enjoy conspiracy theories as much as anyone and don't find it hard
to believe some in the agency crowd are actually quite well-versed
(knowing they need not deduct from nonresidents), hoping to pad their
own profit margins by deducting an arbitrary percentage as
"withholding," and reporting (to the tax authorities) that they made
full, tax-free payments (or not reporting any "withholding." Is it
really possible to get away with that, though?

Questions

If a client in Japan began deducting withholding from my pay, how
might I determine that the year-end 源泉徴収書 they would presumably mail
me is legit and on file with the tax office?

What are the penalties for clients that (needlessly) deduct
withholding but fail to report it?

Is there a procedure in place for nonresidents to have any withholding
refunded by the tax office? I believe there is but having never used
it, I've forgotten.

Wally Moore in Oregon

[Minoru Mochizuki]

I believe anything is possible.
However, if one actually do things like you described, in particular,
deducting 10% from the payment to a translator and not reporting it to the
taxation office in order to pocket the difference is a pure crime. The
person is liable to be punished for such a fraudulent act.

I might add, however, that it seems to me that the Japanese legal system is
rather lenient on white color crimes compared to the rulings in the Western
world including U.S. Particularly if the matter is say below $10,000.
Prosecutors and courts seem to be too busy for other types of crimes. Thus,
I think it is all possible for a person to deduct 10% from your payment in
each occasion if you work only a few times a year for the particular client
and the total amount billed is, say 1 million yen or less for the particular
year, and pretend to forget that it actually occurred.

The above is only my theory on something that could happen and I am not
suggesting anyone to do any illegal acts.

Minoru Mochizuki


-----Original Message-----
From: Wally Moore [mailto:horn...@gmail.com]
Sent: Thursday, November 19, 2009 1:23 AM
To: Honyaku E<>J translation list
Subject: Re: 10% tax withholding for translators based outside japan

[christopher blakeslee]

2009/11/18 Wally Moore <horn...@gmail.com>

Questions

If a client in Japan began deducting withholding from my pay, how
might I determine that the year-end 源泉徴収書 they would presumably mail
me is legit and on file with the tax office?

What are the penalties for clients that (needlessly) deduct
withholding but fail to report it?

Is there a procedure in place for nonresidents to have any withholding
refunded by the tax office? I believe there is but having never used
it, I've forgotten.

I don't remember the details, but I did have a client (direct, not an agency) deduct taxes on my first invoice,  I filled out the forms to get them to stop, which they did, and also filled out the forms to get a refund from the tax agency . I received the refund in a few months time as a wire to my US bank without any noticeable fees being removed. I don't remember waiting until the end of the year, I think they sent me the 源泉徴収書  or its equivalent immediately after I squawked.

I guess filing the paperwork is the best way to find out if its legit (and letting the agency/client know you are doing so will probably ensure it is legit).

By the way, when I suggested early on to my CPA that I just get a tax credit for those taxes rather than hassle with the paperwork, she said no dice, the IRS would not allow it, since the Japanese government had no right to collect taxes on work performed in the US, per all the tax treaties.

--
chris blakeslee

[martha mcclintock]

has anyone had to "provide proof of residency" as part of this whole withholding outside of japan thing?

one client who is currently costing me a LOT in terms of fees to my Japanese accountant for figuring it all out now has found some part of all this that requires certificate of residency....

which is fine, if you are in japan with registered addreses... but not so in Australia, where no such beast exists....

any ideas on this wrinkle in this mess?

[Peter Clark]

Dear Martha,
A Justice of the Peace could probably sign something along the same lines. Write your own letter, provide supporting documentation (driver's license with current address, electricity bill, library card), then get the JP to sign and seal it for you.
 
Just an idea.
 
Peter Clark

---

View photos of singles in your area! Looking for a date?

[martha mcclintock]

good idea! my partner also figured my tax accountant (who is an australian notary) could do something, since he can swear i live here and handles my taxes every quarter etc.....

now to see if this step is really necessary....

thanks!

martha

-- 

[christopher blakeslee]

Martha,

I do now remember that a residency certificate, which is a standard form (6166) the IRS here in the US issues for its taxpayers to avoid double taxation, was required as part of the paperwork.

This looks like what you need as an Aussie resident:
http://www.ato.gov.au/print.asp?doc=/content/43288.htm

Chris

[martha mcclintock]

yeah! that is BRILLIANT!

thank you!

martha @ dashing it out to my japanese tax accountant as we speak!

[U.jay]

Hello everyone,

Thank you all for all the responses!! It has been really useful to
read through, and even though the information is quite varied and
conflicting, I now get a general sense of how it works.

>>In case you are based in India, a double taxation prevention treaty
exists between Japan and India.

---This is particularly useful to know, Thank you Gururaj!
I live in Tokyo and am not worried about TDS, but thought to
ask on honyaku when an india-based friend of mine asked me if I knew.

Thanks a lot again everyone!
Best,

Usha Jayaraman

[Ayumi Anraku]

Chika様

税務署の番号を投稿してくれてありがとうございました。
電話したところ、源泉徴収の対象について丁寧に教えていただき、とても助かりました！

現在は番号が変わっていて、電話すると録音メッセージが教えてくれる番号に電話すると、下記の番号に電話するよう勧められました。
+81 3-3221-6011　-　麹町税務署　日本, 〒102-0074 東京都千代田区九段南１丁目１−１５ 九段第2合同庁舎

（ずいぶん前の投稿への返信ですが、本当に助かったので。）

安楽歩美 | Ayumi Anraku

ポルトガル語翻訳者
Brazilian Portuguese Translator

On Monday, 16 November 2009 16:09:01 UTC-2, chikasan wrote:

税金問題でお悩みの皆様へ

日本の税務署に聞くと色々教えてくれますよ。一定した筋の通った回答を得られます。青色申告会でも、外資企業の多い港区とか渋谷区とかがねらい目。会員じゃなくても結構親切に教えてもらえます。日米租税協約のことももちろん詳しく教えてくれます。それか、日米あるいは国際の税務申告を扱っている現地CPAなどにお尋ねになると良いでしょう。申し訳ありませんが、米国内の税務担当官は当てにならないというのが、経験上の実感です。そうじゃない地域ももちろんあるんでしょうが．．．1年の滞在期間の税金はアメリカで申告しなくて良いと言う担当官がいたり、とんでもない金額を言う担当官がいたり、もう、問い合わせするたびめちゃくちゃな回答しか得られず．．．。まぁ、これは愚痴ですけど。

〒100-8102 千代田区大手町 1-3-3 電話番号03-3216-6811(代表)
日米租税協約と10%の源泉徴収について聞きたい、と仰れば担当官に回してくれます。


Chika