Japan and Switzerland have determined that Yuko Matsuoka, the Japanese translator of the global best-selling Harry Potter series, effectively resided in Japan through 2005, upholding claims by tax authorities she failed to declare taxable income in the three years to 2004, sources said.
Matsuoka, 63, had asked for consultations between the Japanese and Swiss authorities over her residency after insisting she did not declare her income in Japan because she lived in Switzerland. She made the request to avoid having to pay taxes in both countries, as she had already declared taxable income in Switzerland.
Japanese tax authorities have ordered her to pay more than 700 million yen in back taxes for 3.5 billion yen in undeclared income in the three-year period because she was then involved in a publication business in Japan and frequently returned home.
Given that the two nations have determined she resided in Japan through 2005, authorities here are also expected to impose back taxes on her income in 2005.
The two countries agreed Matsuoka has resided in Switzerland since 2006 based on the number of days she spent there.
“I should point out that my good faith has been recognized by the competent authorities of both nations,” Matsuoka said in a statement issued in Geneva. “My mission and joy in life is to bring the fantasy of the Harry Potter series to many millions of young readers in Japan, not to encourage fantasy by commenting on such sensationalist figures.”
Japan taxes resident Japanese on all income, whether earned in or outside Japan. Nonresidents, or those Japanese nationals who live abroad, are required to pay tax, which is deducted at the source, if they gain income in Japan.
Matsuoka has paid 20 percent of her income from translations in the deduction tax format through the publisher.
In Switzerland, the tax rate on the equivalent of the income in the Matsuoka case would be less than 40 percent, compared with 50 percent in Japan, according to tax experts.
Matsuoka has translated the Harry Potter series of books by British author J.K. Rowling since 1999. The Japanese versions have been published by Tokyo-based Say-zan-sha Publications Ltd., a company with which she is directly related.
Matsuoka took over the post of president of the publisher from her husband after he died in 1997, but she left the post in December 2005. She is currently a company director.
Matsuoka bought a condominium in Switzerland in 2001 and has transferred her resident registry from Japan to Switzerland.
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