On March 22, Japanese newspapers reported that the Japanese tax authorities found Mr. Andrés Iniesta, Spanish football player, who was a member of a J-League soccer team to have failed to declare an income of approximately 860 million yen.
It is reported that the tax office pointed out that he failed to declare an income of about 860 million yen for 2018 when his contract was for less than one year, and the tax office ordered him to pay an additional tax of about 580 million yen.
For foreign players, the tax rate differs between "residents" who have their base of residence in Japan and "non-residents." For "residents," the highest tax rate of 45% is applied to income exceeding 40 million yen, and a final tax return is required. On the other hand, for "non-residents," only withholding tax (tax rate is about 20%) is required.
Those articles say that Mr. Iniesta did not file a tax return for 2018 as a "non-resident," but because he had lived with his family in Japan since his initial immigration, he was considered to be a "resident. It is reported that he had filed a tax return for 2019 and thereafter.
(Updates on March 24)
According to Japanese newspapers, football player, Mr. Iniesta has released a statement in Japanese in response to the initial reports. TKG Immigration Consulting Office translated his Japanese statement into English. He says, "In 2018, I filed an income tax return in Spain for worldwide income in accordance with the applicable internal regulations. From 2021 to 2022, the Japanese tax authorities initiated an investigation focused on the discussion of my tax residence and concluded that I was a resident for tax purposes in Japan for part of 2018. The conclusion was that I was a resident during part of 2018. My liabilities from this investigation have also been effectively paid off". And he says, "Since the income for that period was clearly subject to burdensome double taxation, I requested, through my team of advisors, to initiate the so-called 'amicable settlement' provided for in the double taxation agreement between Spain and Japan" and "This process is ongoing and I look forward to a speedy resolution based on the agreement between the two countries and hope to receive a refund of the excess taxes paid" and "Therefore, I ask for your respect and attention to public information while we await the resolution of the claim. I have acted and will continue to act in accordance with applicable laws and regulations".
Taxation is one of the most important issues related to foreign nationals, especially those who stay a long time outside Japan. Here's the National Tax Agency website, which explains the tax system for "residents" and "non-residents".
It may be a good idea to consult a certified tax accountant if you are concerned about your tax payments and filing.