Employment income from both Japanese and Canadian companies, resident in Japan. How do taxes work?

[mio_mio]

Hello Japan Finance gurus! In the following situation, I am wondering how taxes would work:

1. Citizenship: Canada
2. Residence: Japan
3. Employment with (1) a Canadian company, (2) a Japanese company.
4. Income from (1) is paid to a Canadian bank account. Income from (2) is paid to a Japanese bank account.
5. Working 100% remotely with the Canadian company.
6. The Canadian company does have a Japanese entity (K.K.) as well, but employment is only with the Canadian entity.
7. Note: Income from the Canadian company is greater than the amount from the Japanese company.

In this situation, would it just be an ordinary "file your taxes under Japan, and claim foreign tax credits"? Is there anything else one should watch out for?

Thank you!

 

[kristhuy]

@mio_mio

would it just be an ordinary "file your taxes under Japan, and claim foreign tax credits"?

No foreign tax credits should be required in the scenario you described. Canada doesn't generally tax the income of non-resident employees, even if paid by a Canadian employer into a Canadian bank account. Plus, under the Canada-Japan treaty, Canada is prohibited from taxing such income. So you will only pay taxes to Japan. You will need to inform your Canadian employer that you are a Japanese tax resident, though, to prevent them from withholding Canadian income tax.