[grecy]

> My first thought was to work remotely and use the 90 days permitted by the tourist visa. Yet working in Japan on this visa is a gray zone at best and a practice I would stay away from. In fact, the US Embassy in Japan strictly advises against this

I’ve always wondered why countries care about this. If I’m employed in my home country, earning money there and paying taxes, what difference does it make if I happen to sit in another country?

Or if I save up 6 months of PTO, then go to another country for those six months. I’m very much earning money and paying tax in my home country. Why is it ok for me to open my laptop and spend 10 hours a day on random stuff, but not “work stuff”?

[hotspot_one]

> If I’m employed in my home country, earning money there and paying taxes, what difference does it make if I happen to sit in another country?

Why does "home country" have tax priority over "sitting in" country? How does that make sense vs having the taxes paid in "sitting in" country instead of "home country"?

with perhaps the strongest argument being jurisdiction. What gives "home country" the legal right to claim taxes on income earned in "sitting country"?

and that's where things get complicated. In order to pay taxes in "sitting country" you need a "sitting tax ID number" and other admin, also if the taxes involve wage withholding, who does the withholding and ensures compliance, etc, etc.

How does this align, in the US, with state-level taxes? If you were born in MN and moved to FL, do you pay MN or FL state income taxes (noting that FL does not have state income tax)?

Is "home country" the state with the home office of the company which employs you, or the state you live in? Should employees of a California company pay California state income tax even when working remote from Texas (another no income tax state)? Or the classic Washington/Oregon divide?

[chrisfosterelli]

> with perhaps the strongest argument being jurisdiction. What gives "home country" the legal right to claim taxes on income earned in "sitting country"?

Usually a treaty. At least here in Canada the government has tax treaties with most other countries whereby both countries agree the citizen should pay taxes to the country they reside in the majority of the year.

[junar]

The relevant portion of the US-Japan treaty is Article 14(2). As the IRS explains:

> Paragraph 2 sets forth an exception to the general rule in paragraph 1 that employment income may be taxed in the Contracting State where the employment is exercised. Under paragraph 2, the Contracting State where the employment is exercised may not tax the income from the employment if three conditions are satisfied: (1) the individual is present in the other Contracting State for a period or periods not exceeding 183 days in any 12-month period that begins or ends during the relevant (i.e., the year in which the services are performed) calendar year; (2) the remuneration is paid by, or on behalf of, an employer who is not a resident of that other Contracting State; and (3) the remuneration is not borne by a permanent establishment that the employer has in that other Contracting State. In order for the remuneration to be exempt from tax in the source State, all three conditions must be satisfied. This exception is identical to that set forth in the U.S. and OECD Models.

https://www.irs.gov/pub/irs-trty/japante04.pdf

https://www.mof.go.jp/tax_policy/summary/international/tax_c...

[triceratops]

> go to another country for those six months

> paying tax in my home country

Don't you think you've answered your own question?

[wdrw]

This makes no sense... consider these scenarios:

A) You work for a US company, earn money from the US company, pay income taxes in the US, live and spend money (and thus sales taxes) in the US

B) You work for a US company, earn money from the US company, pay income taxes in the US, but live and spend money (and thus sales taxes) in Japan

Clearly (B) is better for Japan economically? I think these laws are mostly enforced out of inertia and not any rational reason.

[triceratops]

> Clearly (B) is better for Japan economically?

Scenario B is amazing for the US. I don't see how it's clearly better for Japan. I don't know about you but I pay far more in income tax than sales tax. You spend money but you also consume government services and infrastructure while paying less in tax to Japan than a resident employed in Japan would.

[wdrw]

But in scenario (B) you're spending money in Japan, basically you're directly injecting US money (your US salary) into the Japanese economy. Don't see why it's "amazing" for the US and not for Japan.

[triceratops]

> Don't see why it's "amazing" for the US

Because you're paying US income taxes while consuming next to no US government services or infrastructure.

> But in scenario (B) you're spending money in Japan

Anyone who lives and works in Japan spends money in Japan. What's great about that? Most of those people also pay taxes.

> basically you're directly injecting US money (your US salary) into the Japanese economy

Japan might say: if this US company doesn't mind someone working from Japan and paying them an American salary, why not a person who already lives there and pays taxes there? That's obviously better than someone new who doesn't pay taxes there.

[chrisfosterelli]

I think you both are right in a way and what is maybe relevant is the duration.

If someone lives full time permanently in another country working remotely, they probably are already actually a tax resident of that country and would typically pay tax to that country.

What the country doesn't want is someone traveling and in the country for a few months and then taking a local job that could have been taken by a citizen while also not being a tax resident, which is what the work restrictions on visas are intended to prevent.

But if someone is traveling and in the country for a few months, and works remotely while there, it really makes little difference to the country compared to another tourist other than the fact that the visitor now has access to more funds to be spending in their country while there; but visas don't support this well.

[digging]

When you put it that way, the answer seems obvious. You're not paying taxes to the country you're residing in. You're not paying taxes for the infrastructure you're using.

Why is it ok for pure tourism? Because tourism is expected to be shorter-term, and you're likely to be putting more money into the local economy as a tourist.

So they need to register this at the very least. I don't know if they tax digital nomad work but they do obviously want to have some control over it.

[arandomusername]

> what difference does it make if I happen to sit in another country?

Because you're breaking the law in that country and your country is actually trying to be help you not do that.

[returningfory2]

But why is the law this way? Why not permit it?

[elzbardico]

Those laws where designed before you had the relativelly new phenomenon of digital nomads.

They were created so the local companies wouldn't hire foreign citizens under the table, skirting taxes and depressing wages for local workers, which would be an unpopular outcome amongst voters.

[grecy]

Working for a local company is an entirely different thing, and not what I’m asking about at all.

[elzbardico]

I know. I am telling you why the laws were created on the first place. Nobody though about putting an exception. And frankly, even if they did think about it, they would probably still do the same, to avoid the legal loophole of local companies using a foreign employer of record to hire cheaper foreign workers.

For every petit-bourguoise privileged nomad software engineer there are thousands of potential low-skill foreign workers that companies are eager to employ to pay less and circumvent local worker protection laws.

All the fiscalization and enforcement structure along with the law is designed for this use case and any seemingly innocuos exception on the law can be exploited by bad actors, so, govern are relutant to do so just because a few rich kids from sillicon valley want to play modern colonial dandy.

[arandomusername]

Because the laws were created before the idea of working remotely.

[chrisfosterelli]

> I’ve always wondered why countries care about this. If I’m employed in my home country, earning money there and paying taxes, what difference does it make if I happen to sit in another country?

Based on the practical enforcement I get the feeling that most countries don't really care about this, but this situation started happening much faster than visa law changes. Hence the grey area.

[kmeisthax]

Well, they probably want to double-tax your wages[0]. But that's why the digital nomad visa class was established.

But the real explanation is mostly just that it's how the law was written. In general, laws are brokered agreements between those who are currently in power, so they have no principles. More specifically, when countries[1] started implementing categories-and-quotas based immigration control, they decided leisure travel should have its own category, and wrote a restrictive definition of a tourist into the law.

It's important to remember that at the time these laws were written, remote workers didn't exist. If you were entering a country and doing work, it was going to be for a local business, and that visa category had far more restrictive visas intended to privilege native workers over foreign in the labor market. Ergo, the tourism visa has to exclude any work at all. This separation was carried forward into the various reciprocal[2] visa-free travel arrangements that made it so you don't have to physically go to an embassy and file paperwork to get a tourist visa.

Of course, all of this is silly in the Internet age, but good luck convincing every country in the world to allow worldwide labor rights.

[0] Fun fact: the US taxes based on citizenship, not residency, so you will always be double-taxed as a US emigrant, even if you're not remotely working for a US company.

[1] I realize Japan is probably a bad example for this discussion, because they used to be completely closed to both immigration and emigration for over a century. This policy even has a name: "sakoku". In contrast, America used to have an extremely racialized immigration policy, which is what was replaced with the (deracialized) categories and quotas. Before that policy, we actually had a really liberal immigration policy.

[2] COVID-19 notwithstanding