Just recently, Japanese indie creator Nupuryu, known for adult titles such as Ruins Seeker and Yarimono, disclosed that their financial institution was declining to handle an international payment from their publishing partner concerning earnings from a game. In a fresh blog entry (link is NSFW), they delved deeper into the matter, shedding light on another disconcerting outcome of the so-called “debanking” predicament impacting certain adult game developers in Japan.
Nupuryu reports that earnings stemming from foreign sales are still regarded as taxable income under local regulations, even if the actual payment is obstructed and fails to reach the developer’s bank account. This recent incident arises from income generated by an adult game developed by Nupuryu and distributed on Steam via a publishing house based in Taiwan. Once the publisher initiated an overseas wire transfer to Rakuten Bank, a leading Japanese online bank, the institution requested supplementary paperwork due to compliance standards, including details about the transaction and a copy of the game’s publishing contract. Despite Nupuryu providing the requested documents, the transfer was eventually turned down, with the bank declining to provide a reason for its refusal.
Although Nupuryu admits they had prepared for the possibility of the transfer being denied, they note that the tax implications make the scenario especially concerning. According to the developer, uncollected foreign income must still be documented as accounts receivable for tax purposes, resulting in income tax responsibilities regardless of whether the funds are successfully transferred to Japan. The creator offered a hypothetical case where 30 million yen in overseas earnings would still incur approximately 10 million yen in Japanese tax liability, even if the money never reached their account. They characterize the situation as “excessively harsh.”
Nupuryu contends that collecting overseas revenue from adult games has become considerably more challenging over the past five years. While banks have tightened anti-money laundering protocols in recent times, the developer asserts that they, similar to credit card firms, are effectively limiting legal adult content by refusing to process payments without providing explanations.
Following the rejection of the latest transfer, Nupuryu states they are now investigating alternative banks and payment solutions with their international publisher. The developer also intends to keep track of which financial institutions approve or deny future transfers.