6 months in Canada-6 months in Japan while working for a Canadian employer: is it possible?

[greenmart123]

Hello. I work for an IT company, that allows us to work remotely. Is it possible to work 183 days in Canada (to keep Canadian tax residency) and the rest - work from Japan for the same Canadian employer? I mean is it possible to make it clear and legal, in accordance to all laws? What type of visa would I need to have? I'm a spouse of a Japan citizen.

 

[kristhuy]

@greenmart123

I mean is it possible to make it clear and legal, in accordance to all laws?

Yes. You will need to familiarize yourself with the concept of a "jūsho " (住所), though. See this section of the wiki for more details.

If you never establish a jūsho in Japan (meaning that you can't join the resident register, etc.), and you stay in Japan for no more than 183 days in any calendar year, you can use Article 15(2) of the Japan-Canada treaty to avoid declaring or paying tax on your employment income to Japan.

However, if you never establish a jūsho in Japan it may be difficult to renew your visa, since the Immigration Services Agency tends to see a visa as unnecessary in that situation (i.e., you aren't really "living" in Japan so there is no obvious reason that you should continue to have permission to live in Japan, from the ISA's point of view).

If you establish a jūsho in Japan but continue to fulfill the criteria for residency under Canada's domestic tax laws, you will likely be subject to double-taxation unless you assert your right (derived from Article 4 of the Japan-Canada treaty) to be taxed as a non-resident by one of the two countries. A key function of tax treaties is to resolve "dual tax residency" situations by enabling the taxpayer to assert non-resident status in one of the two countries.

Which country you can assert non-resident status in typically depends on the strength of your ties to each country. Your case is difficult to speculate about in this regard, because your occupational ties would clearly favor Canada, while your "family home" (where your spouse lives, etc.) may be in Japan?

If you are entitled to assert non-resident status in Japan under the treaty, then you can use Article 15(2) to avoid Japanese tax if you are present in Japan for no more than 183 days in any calendar year.

If you are entitled to assert non-resident status in Canada, you will need to file a Japanese tax return to declare your employment income, claiming a foreign tax credit with respect to the Canadian tax you paid on the income. Regardless of whether you choose to assert your non-resident status with respect to the CRA, the foreign tax credit you are able to claim in Japan will be capped at the amount of tax that would have been payable if you had asserted your non-resident status (i.e., if you could have used the treaty to avoid a certain amount of tax, you can't claim a foreign tax credit for that amount).

What type of visa would I need to have?

Any visa that allows you to work in Japan for a foreign employer. In your case it sounds like the only realistic option would be a spouse visa.

 

[joshua0019]

@greenmart123 Obviously spouse visa is your only option. You cannot get a work visa for what you describe as your employer would not be able to sponsor the visa.

 

[greenmart123]

@joshua0019 Thank you, gdore.

Speaking of Spouse Visa. Is it possible to get it in Toronto embassy before leaving Canada?

 

[joshua0019]

@greenmart123 You have to.

It's something you have to apply to and give all the proper documents and forms. It's not something you get at the airport when you land in Japan like when you go as a tourist. Actually any form of visa need to be given before you go, the only "exception" is for tourist who are from a country that is part of the visa waiver program... because they do not need a visa.

Also the embassy is in Ottawa, in Toronto it's a consulate (but they can process visa).

 

[resjudicata]

@greenmart123 Yea I did this but from Vancouver - you will actually need someone in Japan (a guarantor or family member) to sign a document called “certificate or eligibility” than within three months time of receiving it in Canada you have to enter Japan with it.

At customs they will take it or staple it to your passport I forget- and issue you the “zairyu” card which is effectively your main ID and visa all in one.

You then later have to apply for what’s called “my number” which is like your Canadian SIN card. The only way to do what you are trying to achieve is to have the remote job in Canada before leaving with keeping your mailing addresses Canadian and keeping your banks open / still using them in Japan. Which might be a bonus due to the exchange as well.

Getting a job abroad will be my more difficult due to time zone changes so before leaving you will need to confirm with your employer. I’ve met people in language schools who do this. They work at night and live in the day, seems really brutal to miss the sleep.

Why not just study Japanese and try to get a daytime job here.

 

[greenmart123]

@resjudicata Thank you. I have a job that I like, plus it's difficult to give up with all "achievements": vacation time, etc, earned during the last 10 years... Thank you very much for your answer.

 

[resjudicata]

@greenmart123 I’d really try to convince your boss to work out some schedule for their off hours so you can still help when they shut down. Good luck!

 

[mariangel]

@greenmart123 Your spouse needs to be a resident of Japan before you can apply.

This is fine if they plan on living in Japan full time but it could be problematic if they are moving back and forth with you. More importantly, CRA could insist they pay taxes in Canada if they maintain a presence in Canada.

 

[joshua0019]

@mariangel Really ? My friend lived with his wife in Canada when he applied for spouse visa to go work there as he found a job that could not sponsor his visa.

 

[mariangel]

@joshua0019 Then he must have got his in-laws to help. I was told the rules are clear that the sponsor of the spousal visa must be a resident of Japan but the sponsor does not have to be the spouse.

 

[msulli]

@mariangel This isn't true, friends have got spouse visas from their Japanese partners when both have been living abroad.

However, it seems most Japanese don't "de-register" themselves when they move abroad so are in some kind of grey zone where they don't live in Japan but are still in the system somehow.

 

[clearlycrystal]

@msulli If I were the Japanese government I would tolerate that grey zone indefinitely - essentially they get to have people paying into the national insurance systems with very little chance of actually using them.

 

[msulli]

@clearlycrystal the ones I know didn't pay into the ni when they were not here

 

[mariangel]

@msulli It is possible they relaxed these rules during the pandemic. The rules I have knowledge of pre-date the pandemic and come the Japanese consulate when we went through the process.

 

[msulli]

@mariangel it's possible. Many things seem possible if you call and talk to someone but this was during C19 time and in China

 

[mariangel]

@greenmart123 The employer could be responsible for paying Japanese payroll taxes while you are in Japan. That would be a considerable burden on them. You would have pay income taxes in Japan. You can do some stuff with a sole proprietor to relieve your employer from the burden. OTOH the tax treaty could exempt you but ONLY if the employer has no presence in Japan.

Basically inform yourself of the tax consequences because it can a nightmare. As a rule of thumb never spend more than 4 months in Japan per 12 month period if you want to establish you are a resident of Canada and not Japan.

 

[kristhuy]

@mariangel

The employer could be responsible for paying Japanese payroll taxes

I think you mean Japanese corporate income tax. Japan doesn't have "payroll" tax. Employees' health insurance and pension are a bit like payroll taxes, but foreign employers are not required to pay those.