The 源泉徴収 (gensen chōshū) system is a tax withholding system in Japan that applies to freelancers and others. Under this system, clients are required to withhold a portion of the payments they make to freelancers and remit them directly to the tax office on the freelancer's behalf. This is intended to ensure that freelancers pay their taxes properly and on time. The amount of tax that is withheld varies depending on the type of work being performed and the income of the freelancer.
This system applies to a wide range of freelance work, including services provided by freelancers in fields such as design, writing, and translation. However, not all payments to freelancers are subject to this tax withholding system. The specific types of work that are subject to the system are determined by a list of limited enumerations.
The amount of tax that is withheld varies depending on the amount of the payment being made. For payments of 100 million yen or less, the tax rate is 10.21%. For example, if the payment is 10,000 yen, the amount of tax withheld would be 10,000 yen x 10.21% = 1,021 yen.
For payments of more than 100 million yen, the tax rate is 20.42%. For example, if the payment is 200 million yen, the amount of tax withheld would be (200 million yen - 100 million yen) x 20.42% + 102,100 yen = 306,300 yen.
For more information, see:
https://www.nta.go.jp/taxes/shiraberu/taxanswer/gensen/2792.htm
https://www.nta.go.jp/taxes/shiraberu/taxanswer/gensen/2795.htm