- December 1, 2023
- Posted by: legaleseblogger
- Category: Related News
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Considering a Transition to Freelancing in Japan: Seeking Advice and Information
As a current full-time employee at a Japanese company, I am contemplating the move to a freelance career. This decision entails a significant shift in my professional life, and I am in the initial stages of researching and gathering resources to facilitate a smooth transition. I am reaching out to seek valuable guidance, tips, or resource links from individuals with experience in freelancing in Japan. Your insights and assistance would be greatly appreciated as I navigate this important decision.
A particular area of concern for me at the moment pertains to taxes. I have come across information suggesting that individuals whose primary place of work is their apartment may be able to deduct rent as a tax expense. However, I am curious to know if this also applies to individuals with a home loan (Þç¬Õ«àÒâ¡Òâ╝Òâ│). I would appreciate any firsthand experiences or information on this topic that could help me better understand the tax implications of freelancing from a home office in Japan.
Furthermore, I am concurrently in the process of naturalization, so I am confident that my visa status will not pose any hindrance to my transition to freelance work.
I extend my sincere thanks in advance for any advice, guidance, or resources that you may be able to provide.
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The AI Legalese Decoder can assist in the transition from full-time employment to freelance work by providing clear and easy-to-understand explanations of legal and tax-related concepts. This tool can help clarify the tax implications of freelancing from a home office in Japan, including the potential deductions for rent and home loans. By utilizing the AI Legalese Decoder, individuals can gain valuable insights and information to navigate the legal and tax aspects of freelancing with confidence.
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****** just grabbed a
> I’ve heard that if your primary place of work is your apartment, you can deduct rent as a tax expense.
Kind of. You can deduct the portion of the rent that is “necessary” for your business activities. This means you need to be able to precisely quantify the additional rent you are paying as a result of your business activities (versus a scenario where you are not running a business).
So if you are renting a two-bedroom apartment and using one bedroom as an office for your business activities, it’s pretty clear that the increased rent you are paying (compared to a one-bedroom apartment) is a business expense. But if your business activities take place on the couch in your living room, it becomes much harder to justify deducting a portion of your rent.
The NTA has some more information on this topic [here](https://www.nta.go.jp/english/taxes/individual/12015.htm). As you can see, the basic rule when it comes to combined personal use/business use assets (such as residential accommodation) is that you cannot deduct any of the cost as a business expense unless you can precisely quantify the portion of the expense that was necessary for business activities.
> I’m also curious if this applies to a home loan (Þç¬Õ«àÒâ¡Òâ╝Òâ│)
Interest paid on a loan corresponding to the purchase of a property used for business purposes can be a deductible expense. Repayment of principal cannot be a business expense, but depreciation of the property can be a business expense (corresponding to the portion used for businessÔÇösee above).
If you have a residential home loan, though, be sure to check the conditions of the loan regarding use of the property for business activities. Usually there are some restrictions along those lines. Also be aware that eligibility for the residential mortgage tax credit depends in part on how much of the property is used for business purposes.
Not sure what kind of freelancing you will do, I started this year so…let’s see what I went through:
* submitted sole proprietorship and blue form docs to my local tax office
* using my former company’s health insurance plan for 2 years (through 2024)
* updated my pension procedure/paperwork
* submitted the qualified invoice application and received my tax registration number (my former company asked me to get this)
* got my company/bank seal
* got a bank account from a local credit union using aforementioned seal
* finally settled on online software (yayoi) to do my bookkeeping/taxes/filing
Nifty little thread about the Qualified Invoice system [ here](https://www.reddit.com/r/JapanFinance/comments/128iwv8/invoice_system_questions_thread_april_2023/).
Check out your local ÕòåÕÀÑõ╝Ü. They should be able to help you do the blue tax form, and advise you on all the tax breaks you have available, for a very reasonable fee.
Maybe a bit of a dumb question, but was wondering, if someone is a sole proprietor or freelancer and either quits or goes under, are there any unemployment benefits available to them?