Expatriate tax ebook - Japan

Working outside Japan
An offshore compensation package is an important tax planning tool for non-permanent resident taxpayers who spend part of year on work assignments outside Japan. Having salary paid offshore allows the taxpayer to exclude the income related to the periods spent abroad on business from Japan tax.

However, Japan’s income tax law specifies beneficial tax treatment of the following benefits providing certain conditions are met.

An employment agreement properly structured with respect to certain benefits in kind, such as residential accommodation or children’s school fees, can result in significant tax savings.

Other issues that should be considered are the tax implications of offshore or onshore compensation arrangements, the timing of compensation benefits and taxes, and special issues related to directors or senior officers, foreign entertainers, and athletes.

Grant Thornton Japan’s Expatriate Tax team can advise expatriates on these and related opportunities.

Information about Japan:

• introduction
• facts and figures
• basis of taxation
• what taxes?
• tax planning opportunities

Last updated 20 June 2011 

This information has been provided by Grant Thornton Japan, a member firm within Grant Thornton International Ltd, and is for informational purposes only. Neither Grant Thornton Japan nor Grant Thornton International Ltd can guarantee the accuracy, timeliness or completeness of the data contained herein. As such, you should not act on the information without first seeking professional tax advice.

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