I'm an American that's been living in Japan for the past 2 1/2 years, and I work for an American company (small startup). I receive my income via a US bank account, after paying income tax.
However, I've had "Tax For Expats" handle my U.S. tax returns, so in the end, all my federal / state income tax comes back. Pretty sure they're using the "Foreign Earned Income Exclusion" when submitting my tax returns.
I assumed that I would have to pay Japanese taxes, especially since all my US taxes are returned to me. However, I've asked the local tax office multiple times, describing exactly what I've stated here... and each time they've told me that if I'm working for an American company, and my salary is paid to an American bank, and I pay American taxes (even if they are later returned to me... yes, they explicitly included this), then I am not required to pay taxes in Japan.
I even went as far as to ask if this would be the case even if I continued to live in Japan for many years, to which they answered that I still would not be required to pay Japanese taxes.
Reading online, it seems that as long as I'm not considered a "permeant resident", I'm not required to pay taxes on foreign income until I've lived in Japan for 5 years. So I suppose for now I'm fairly certain I'm not required to pay taxes. But, according to my local tax office in Japan, they told me that I would not be required to pay taxes even after that.
Is what they're saying true? Is anyone else in the same boat as me? Am I really not required to pay Japanese taxes?
Is it because of a tax treaty between Japan and the US? But it seems strange that that would work if I'm taking the "Foreign Earned Income Exclusion".