It was found that Mitsubishi Electric (Chiyoda-ku, Tokyo) had been pointed out by the Tokyo National Taxation Bureau that it had not collected income tax withholding over the salary paid to overseas employees who had returned to Japan temporarily due to the influence of the new corona. The Income Tax Act stipulates that salaries for working in Japan are subject to income tax. The company is believed to have determined that the returning employee was not taxable because he continued to work overseas. It was discovered in a tax audit by the same bureau, and an additional tax of regarding 140 million yen was levied.
Hundreds of employees who had been seconded to local subsidiaries in Asia and Europe have returned to Japan temporarily since the spring of 2020, when the infection with the new corona was spreading, according to people familiar with the matter. While returning to Japan, he was involved in overseas operations such as participating in local meetings by remote work, and the company paid the salary during that time.
■ Remote overseas business … “If you work in Japan, pay tax in Japan” National tax pointed out
The Income Tax Act stipulates that even those who have lost their place of residence in Japan due to overseas transfer, etc. will be subject to income tax on their salary for working in Japan and must be withheld. For this reason, the National Taxation Bureau seems to have decided that the company had to withhold the salary paid for working in the country during the temporary return to Japan. About 600 million yen paid in the one year until March last year was subject to tax withholding, and a total of regarding 140 million yen including non-payment additional tax was collected.
The company’s public relations department commented to the Asahi Shimbun that “we will refrain from responding to the existence and content of tax audits.”
