OSAKA--Osaka tax authorities said three J.League soccer players from overseas failed to report more than 2.1 billion yen ($13.9 million) in income gained during their playing time in Japan.

Andres Iniesta, 39, a former midfielder on the Spanish national team, did not report about 860 million yen in income when he was a member of Vissel Kobe, the Osaka Regional Taxation Bureau said.

The bureau determined there was a period when Iniesta did not file a required tax return despite having Japan as his home base of residence.

The others cited are Kim Jin-hyeon, 36, a former South Korean national team goalkeeper who currently plays for Cerezo Osaka, and Anderson Patric Aguiar Oliveira, 36, a forward from Brazil who now belongs to Nagoya Grampus.

The three have been ordered to pay back taxes and penalties estimated to total about 1 billion yen.

The Income Tax Law has two categories: “residents” who have their domicile of residence in Japan; and “non-residents” who do not.

Foreign athletes listed as non-residents only have to pay a “withholding tax” of about 20 percent.

Their tax burden is much lighter than that for “residents,” who are required to file tax returns and face a maximum tax rate of 45 percent on income exceeding 40 million yen.

According to the National Tax Agency, non-resident status is given to athletes who have signed contracts valid for less than one year and if they meet certain requirements, such as having no family member accompanying them in Japan.

Iniesta was a member of Vissel Kobe from July 2018 to July 2023.

His 2018 contract was for less than one year, and he earned about 860 million yen that year. He apparently assumed he was a non-resident, a source said.

From 2019 onward, his contract was for multiple years, and he filed tax returns as a resident, the sources said.

However, tax officials determined that Iniesta was also a resident of Japan in 2018 because he had been living with his family in Kobe since joining the team.

The Osaka bureau, therefore, ordered him to pay back taxes totaling about 580 million yen.

The National Tax Agency apparently regarded both Kim and Patric, who did not file tax returns, as residents, given that they are living with their families in Japan.

According to sources, Kim was ordered to pay about 220 million yen in back taxes on more than 700 million yen in income gained through contracts and other payments over the five years he played for Cerezo Osaka until 2020.

Patric was told to pay about 210 million yen in taxes on more than 600 million yen in income gained over the five years until 2021 when he was a member of Sanfrecce Hiroshima and later Gamba Osaka.

Iniesta did not respond to an Asahi Shimbun request for an interview made through his current team.

Cerezo Osaka and Nagoya Grampus said Kim and Patric, respectively, do not want to comment on matters related to their contracts.

In 1999, the Tokyo Regional Taxation Bureau offered guidelines to the J. League office, stating that players would be considered non-residents if they fulfilled three requirements: signing a contract for less than one year; not bringing family members to Japan; and leaving the country during the off-season.

But this information apparently has not spread to the athletes.

“Players have limited knowledge of taxes. It is basic for clubs to clearly state in their contracts that (the teams) are responsible for paying their taxes in Japan, but I think the clubs are not doing enough to address this issue,” said Nobuaki Tanabe, an agent for soccer players.

Shingo Okumura, a licensed tax accountant who consults with foreign athletes on Japanese tax issues, said, “Clubs need to explain in detail when tax returns are required.”

Vissel Kobe and Cerezo Osaka declined to comment on the periods when the foreign footballers played for them.

Sanfrecce Hiroshima replied, “We are operating in accordance with the law,” while Gamba Osaka said, “We are committed to legal compliance.”

Yuki Mabuchi, a lawyer familiar with contract negotiations in the J.League, said clubs often sign contracts that include stipulations that the teams will cover taxes paid by foreign players in Japan.

In such cases, “the main thing is to make the contract valid for less than one year so that the player is treated as a non-resident,” he said.

In February, the tax agency posted a new Q&A page on its website, including examples of cases in which athletes are considered residents.

They included cases in which: the contract period is less than one year but the deal is practically regarded as a multi-year contract; and a family member stays with the athlete in Japan for the majority of the season.

“We have heard there was a difference of opinion regarding some tax declarations,” a J.League representative said. “We will continue to call for appropriate taxation.”

(This article was written by Takashi Ichida and Yuta Hanano.)