Job Discussion Forums

kinshachi · Joined: 06 Sep 2006 Posts: 50 Location: Sydney

I was reminded recently of an issue that came up when I started here. A friend of mine working here claimed that because of the tax treaty between Australia and Japan, Australians aren't required to pay tax for the first two years of teaching here, and consequently, her work didn't take tax out of her pay. My work disagreed. After an extensive internet search, I found the text of the treaty, and unless I'm reading it wrong, Article 15 seems to support her claim.

The link: http://www.austlii.edu.au/au/other/dfat/treaties/1970/9.html

Anyone else ever heard of this?

may be going · Joined: 18 May 2004 Posts: 129 Location: australia

didn't look at your link but i can say that as an aussie working at a uni here i'm tax free for first 2 years.

Gordon · Joined: 28 Jan 2003 Posts: 5309 Location: Japan

You guys have great beaches AND no tax for 2 years. Must be nice Crying or Very sad

kinshachi · Joined: 06 Sep 2006 Posts: 50 Location: Sydney

callmesim · Joined: 27 Oct 2005 Posts: 279 Location: London, UK

may be going · Joined: 18 May 2004 Posts: 129 Location: australia

i'm a non-resident for tax purposes in oz anyway.....

kinshachi · Joined: 06 Sep 2006 Posts: 50 Location: Sydney

Well, we've got at least two people so far who are (or were - my friend has since gone home) living here tax-free. Any more?

And, after all, this treaty was enacted in 1970, when Japan was rather more desperate for English teachers, and it has not yet been superceded, as far as I know. I was told it was a way of sweetening the pot for people who wanted to work here back then...

It might seem too good to be true, but I haven't yet seen any evidence to contradict it...

markle · Joined: 17 Jan 2003 Posts: 1316 Location: Out of Japan

So how do you go about implementing this? You tell the local tax office that because you are Australian you don't have to pay tax? And they accept that? Hmm my guess is that after you go home and submit your tax returns and state you were overseas for x number of years and the ATO checks with the Japanese Tax office and discover you weren't paying tax for 2 years then you will be hit with a nice fat tax bill.

callmesim · Joined: 27 Oct 2005 Posts: 279 Location: London, UK

Exactly. Unless you can get categorical proof, pay Japanese tax! It's less than 10%. Besides, I have no idea how you could avoid paying it in the first place!

The link you provided is headed:

Agreement between the Commonwealth of Australia and Japan for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income, and Protocol

Which is why I still think Article 15 refers to not being taxed twice.

G Cthulhu · Posted: Tue Nov 07, 2006 2:48 pm Post subject:

You could always try asking the Australian Embassy. :)

IIRC, Australians are able to choose whether they pay tax for the first two years. If the choose not to pay Japanese tax then they are liable for Australian tax on their Japanese earnings once they return to Australia. If they elect to pay the Japanese taxes then they are exempted Australian federal taxes. All that only applies for the first two years in Japan. After that, they are required to pay Japanese taxes and automatically exempted Australian taxes anyway.

You'd have to be insane not to pay the Japanese taxes given they're much lower than Australia.

callmesim · Joined: 27 Oct 2005 Posts: 279 Location: London, UK

That sounds far more likely than the Tax Free Bonanza.

scorchio · Joined: 14 Jun 2006 Posts: 36 Location: Sydney

I've hear that JET teachers don't pay tax - is that right?
Maybe the issue here is the definition of 'educational institution'. I don't think that private companies like Nova, ECC etc fall under that heading.

G Cthulhu · Posted: Thu Nov 16, 2006 2:34 pm Post subject: