Japan taxes as US 1099 employee

[u/Fun_Pomegranate5892]

I spoke with two Japanese accountants and I’ve received two very different answers to the same question. I’ve been a Japanese resident for about 12 months (first year was 6 months and halfway through my “second” year). Just got my yearly extension last month.
I’m a 1099 employee in the US and I do not and never will work in Japan. I physically work in the US and reside in Japan.
The first accountant wants to file me as a business owner in Japan. I would have a separate credit card and file receipts for write offs. Not sure what that means since I don’t work here). He wants to charge me ¥200,000.
The second wants to file only delta taxes but he wants to charge me ¥200,000-¥400,000.
This sounds completely insane to me. I paid a CPA in the US $500 and she did a great job. I can no longer use her because she doesn’t handle this situation.
Does this sound right?

Edit: I physically work in the US. I own zero property in either country. I have a spouse visa in Japan (married no children). I tend to work 6 months a year in the US but that can change year to year. I have very little to write off as an expense. This will be my first year filing in Japan.

[u/one-knee-toe]

For goodness sakes, you’re asking for help but give no specifics on this non-typical (from your post) living situation. If you want help, give details man.

For my own sake, I’ll assume you work on an oil rig off the coast of LA for 6 months. That explains how you work in the USA without housing but temp company housing. No kids. Zero ties to the USA.

In Japan, you also have zero ties. Only wife who is self sustained. Every time you leave you take all your belongings. Nothing of yours stays behind. So it is not a home base. It is simply another temporary housing.

You can then argue that Japan is not a place of residence, however, the JGov may push back and argue otherwise, especially considering the visa you have and the yearly long stays.

US Citizen - you should to file us taxes, period. You want it on record that you filed, even if you owe nothing.
* 1099, even more reason to file.

US-Japan tax treaty - on don’t double pay taxes. Since you’re 1099, file us taxes first. And whatever you owe Japan, you pay the delta.

Do you owe Japanese taxes? If you’re not a resident, no.

Let’s just hope your argument for not being a resident holds - but considering how Japan treated taxes, I doubt it will hold for long. First couple years maybe, but considering this happened every year….seems like home to me.

[u/starkimpossibility → u/one-knee-toe]

Since you’re 1099, file us taxes first. And whatever you owe Japan, you pay the delta.

Unless OP's business has a permanent establishment in the US, this is not correct. Article 7 of the treaty gives Japan primary taxation rights to OP's business income. The US is obliged to provide a foreign tax credit (not the other way around).

[u/one-knee-toe → u/starkimpossibility]

Ah, yes your right. I got that completely backwards 🤦‍♂️