First of all
First and foremost, I would like to address the attitude of the Japanese tax authorities in leaking information about the disciplinary action against Iniesta to the media. He is outstanding superhero in Spain. This approach should be condemned, and as a fellow Japanese citizen, I feel ashamed. However, this is the reality of the Japanese tax authorities.
News (2024/3/24)
Andrés Iniesta, the former Spanish national team soccer player who belonged to J1 Vissel Kobe (Japanese football team), along with two other foreign players, Kim Jin-hyeon from South Korea who played for Cerezo Osaka, and Patrick from Nagoya Grampus, have been pointed out by the Osaka Regional Taxation Bureau for tax declaration omissions amounting to over 2.1 billion yen in total. It was revealed through interviews with tax auditors that they were deemed to have a residence base in Japan, as they brought their families along, which led to the assertion that even foreign players are required to file tax returns.
The players who received these notices are Andrés Iniesta, who played for J1 Vissel Kobe, Kim Jin-hyeon, former South Korean national team player who played for Cerezo Osaka, and Patrick, who played for Nagoya Grampus.
According to the National Tax Agency, under Japanese Income Tax Law, foreign players are categorized as “residents” or “non-residents” in Japan. If their contract is for less than one year and they do not bring their families along, they are classified as “non-residents,” resulting in a lighter tax burden compared to “residents” who are required to file tax returns.
According to sources familiar with the matter, Iniesta played for Vissel Kobe from July 2018 to July last year. For the portion of his contract in 2018, which was less than a year, he was reportedly found to have omitted approximately 860 million yen in tax filings.
Japanese tax authority pointed out that because he lived with his family and his contract was considered effectively multi-year, he was determined not to be a “non-resident” but a “resident,” resulting in additional taxes of approximately 580 million yen.
Similarly, it is estimated that Kim’s additional tax for the portion of his contract, totaling over 700 million yen for the five-year period up to 2020, for reasons such as living with his family, is approximately 220 million yen.
Furthermore, Patrick’s additional tax for the period of his contract, totaling over 600 million yen for the five years up to 2021, during which he played for Sanfrecce Hiroshima and Gamba Osaka, is reported to be approximately 210 million yen.
Summary
In Japan’s tax system, the determination between residents and non-residents can indeed be ambiguous, and drawing a clear line can be challenging. In the case of Iniesta, despite his declaration as a non-resident, the National Tax Agency denied his declaration. The distinction between residents and non-residents is crucial, and if there is any confusion or uncertainty, please do not hesitate to consult with us. By seeking advice from tax advisors or professionals, please contact us, Probitas international tax services.
