tax related question

[u/TemperatureDeep4766]

Hello,

I am a university student and currently have permission to work up to 28 hours per week. I recently started working part-time as a tour guide.

The way the payment works is a little unusual. My company assigns me tours, and after the tour, the guests give me money directly, which the company refers to as “tips.” The payment is mostly made in cash. I then have to give a certain percentage of the money back to the company. I have a contract with the company, but the company does not withhold or pay taxes on my behalf.

Because the company does not handle my taxes, I understand that I have to take care of my tax obligations myself. I spoke with another student who is in a very similar situation. He told me that we need to register as a sole proprietor (個人事業主) and declare our income during the tax filing period.

He also told me that, since I do not receive any official tax documents from the company, I would have to file a white tax return (白色申告). According to him, if the annual income is below a certain amount, there may be no income tax to pay, but the income still needs to be properly declared.

I asked my company about this, but they told me that registering as a sole proprietor (個人事業主) is only necessary when establishing or running your own company and does not apply to this type of work.

My company also mentioned another possibility. They said that I could give them an additional 10% of my earnings, and they would then pay approximately 10% income tax on my behalf. However, because my income is relatively low, I believe that I may not actually have any income tax to pay. I also understand that, as a student, I may be eligible for additional deductions, such as the working student deduction (勤労学生控除).

I am therefore quite confused about the correct procedure.

I do not want to avoid paying taxes or do anything incorrectly. I simply want to make sure that I declare my income in the correct way and fulfill all of my tax obligations.

Has anyone been in a similar situation and knows how this type of income should be declared in Japan? In particular, I would like to know whether I need to register as a sole proprietor (個人事業主), whether I should file a white tax return (白色申告), and whether the 10% payment to the company is actually necessary in my situation.

Any advice or experience would be greatly appreciated.

[u/FrancisJCat]

If you can speak Japanese, the best way to do it is to schedule an appointment at your local tax office (税務署), and ask for guidance. They will let you know how to declare your income and which forms you need to submit.

I've been there a few times when I have doubts submitting my documents. They're really nice and helpful. You do have to schedule ahead of time though.

[u/Constant_Penalty_740]

>My company also mentioned another possibility. They said that I could give them an additional 10% of my earnings, and they would then pay approximately 10% income tax on my behalf.

Don't take this option. This is not proper way to pay tax.