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Be wary of your investments -- the TAXMAN is watching

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  • Originally posted by Super Grover View Post
    bank deposits, stocks

    TJ Random included these, too. they are not assets, they are income (if the stocks have been sold)
    If they've been sold, you no longer have stocks, you have the income from the sale of the stocks. Until they're sold, they'ree assets with (hopefully) an unrealized monetary value.

    Bank deposits most definitely are assets. Pretty close to the most liquid assets you can have next to the cash in your pocket...

    ETA: OK, I get where there may be confusion. "Bank Deposits" has a couple of meanings -- money you deposit in the bank (could be income, or just money you're moving around), but also can refer to money sitting in the bank (assets).
    Last edited by iago; 2010-12-22, 11:46 PM.

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    • Originally posted by iago View Post
      If they've been sold, you no longer have stocks, you have the income from the sale of the stocks. Until they're sold, they'ree assets with (hopefully) an unrealized monetary value.

      Bank deposits most definitely are assets. Pretty close to the most liquid assets you can have next to the cash in your pocket...

      ETA: OK, I get where there may be confusion. "Bank Deposits" has a couple of meanings -- money you deposit in the bank (could be income, or just money you're moving around), but also can refer to money sitting in the bank (assets).
      What I want to inform, as per my p.m., is that the NTA can and is enquiring in detail about assets, whether they are producing income or unrealised.

      May as well come out and say it, I got the call this week. I am being full-on audited. So that brings it to three people who I know in my area -- all profs.

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      • Originally posted by Morton View Post
        Reporting your overseas assets and reporting your overseas income are two different things.

        If you have been here a day over 5 years you must pay tax on all your worldwide income regardless of the value of your assets. I would guess that the vast majority of foreigners here over 5 years will have a tax liability of some amount.
        Regardless of value of assets, that's fine, but what I'm seeing is 20m yen or more in INCOME needs to be reported.

        So if I have a stock portfolio of 500,000, but my income and dividends etc only equal 5m yen, I report it? Yes no?

        People seem to be speaking at odds here. Assets and income are not the same thing...

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        • Originally posted by Super Grover View Post
          What I want to inform, as per my p.m., is that the NTA can and is enquiring in detail about assets, whether they are producing income or unrealised.

          May as well come out and say it, I got the call this week. I am being full-on audited. So that brings it to three people who I know in my area -- all profs.
          I'm happy to report any assets. I'm more interested in hearing what I then need to pay taxes on.

          Sorry to hear about your audit. NTA needs a hobby....

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          • Originally posted by Super Grover View Post
            What I want to inform, as per my p.m., is that the NTA can and is enquiring in detail about assets, whether they are producing income or unrealised.

            May as well come out and say it, I got the call this week. I am being full-on audited. So that brings it to three people who I know in my area -- all profs.
            OK, when you are being audited, all bets are off. I think what TJRandom was referring to, as indicated in the official tax guide, is at what level you are required to declare assets as part of a routine tax return.

            And you're right, being vague is a double-edged sword. And you'd better have records and the "paper trail" in case you are audited.

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            • Originally posted by Teacher101 View Post
              So if I have a stock portfolio of 500,000, but my income and dividends etc only equal 5m yen, I report it? Yes no?
              If you've been here five years or more out of the last ten, yes definitely.

              Less than that, it depends, unfortunately.

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              • Originally posted by Teacher101 View Post
                Regardless of value of assets, that's fine, but what I'm seeing is 20m yen or more in INCOME needs to be reported.

                So if I have a stock portfolio of 500,000, but my income and dividends etc only equal 5m yen, I report it? Yes no?

                People seem to be speaking at odds here. Assets and income are not the same thing...
                ONLY? 5,000,000? on 500,000 (dollars?) that is not too shabby. When you report it (and you must) you will likely be in the 33% bracket (maybe higher) and will need to pay any difference between tax withheld and Japan's rate. Then you will have to give the city its cut.

                FWIW, I am seeing that they are at least as interested in knowing how much I have and where as well as what percentage is mine and what percentage belongs to my wife, as they are in getting what they know they're going to get.

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                • During my audit I wasn't asked about any other assets other than those brought up by the NTA. I've also made investments in my wife's name and she has her own investments but they never asked about her either.

                  You know, I can only hark back to what I've wrote before; let an accountant deal with it. Im my case he has asked the NTA precisely what they wanted and a time-limit had been decided due to other committments. It still lasted 3 hours but started off slow and was kind of rushed at the end.

                  Teacher 101, If I were you I would be pretty worried about being caught. You have a potentially massive tax liability. I really can't offer any advice other than not to come to their attention.

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                  • Originally posted by Teacher101 View Post
                    Sorry to hear about your audit. NTA needs a hobby....
                    I think they've already found one...

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                    • Originally posted by iago View Post
                      And you're right, being vague is a double-edged sword. And you'd better have records and the "paper trail" in case you are audited.
                      Maybe I was let off lightly (though I still had to pay over 2 million in tax alone) but I didn't have much in the way of records and it helped me in many ways. Either I had thrown them away, misplaced them or hadn't received them. Either way the NTA could have but didn't force me to get copies. I was pretty stressed out by the whole process and waiting another couple of months to get copies would really have affected my job/health/family and a quick resolution was agreed.

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                      • Originally posted by Morton View Post
                        Maybe I was let off lightly (though I still had to pay over 2 million in tax alone) but I didn't have much in the way of records and it helped me in many ways. Either I had thrown them away, misplaced them or hadn't received them. Either way the NTA could have but didn't force me to get copies. I was pretty stressed out by the whole process and waiting another couple of months to get copies would really have affected my job/health/family and a quick resolution was agreed.
                        Not to mention late penalties!

                        I have been compelled to provide 5 years of data. In two cases, I actually do not have the complete, exact information needed. I said that. I was told to write the authorities concerned to get what I can AND to provide that e-mail exchange. OTOH, there are 2 others which they have not located (for some reason), yet they are open transactions where tax was paid. About what they want, they are being quite aggressive.

                        Teacher 101, you wrote IF. I hope so, though I hope you are getting such a great return on investment. Many Happy Returns! What Morton wrote is on the money.

                        One thing worth noting is that while all of this is going on, the meter is running, so stalling or dissembling is dumb.

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                        • Originally posted by Super Grover View Post
                          Not to mention late penalties!

                          I have been compelled to provide 5 years of data. In two cases, I actually do not have the complete, exact information needed. I said that. I was told to write the authorities concerned to get what I can AND to provide that e-mail exchange. OTOH, there are 2 others which they have not located (for some reason), yet they are open transactions where tax was paid. About what they want, they are being quite aggressive.

                          Teacher 101, you wrote IF. I hope so, though I hope you are getting such a great return on investment. Many Happy Returns! What Morton wrote is on the money.

                          One thing worth noting is that while all of this is going on, the meter is running, so stalling or dissembling is dumb.
                          If you have investments or assets in Canada for certain categories the Canadian Government can intercede and tell the NTA to bugger off. I'd check and see as to just what the agreements are between Japan and Canada if I were you.

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                          • Originally posted by Super Grover View Post
                            ONLY? 5,000,000? on 500,000 (dollars?) that is not too shabby. When you report it (and you must) you will likely be in the 33% bracket (maybe higher) and will need to pay any difference between tax withheld and Japan's rate. Then you will have to give the city its cut.

                            FWIW, I am seeing that they are at least as interested in knowing how much I have and where as well as what percentage is mine and what percentage belongs to my wife, as they are in getting what they know they're going to get.
                            5 million yen is $50,000, not $500,000.

                            @Morton, those numbers were an example, not my real asset holdings.


                            Like I said, I'll be happy to report anything they want to know about my overseas assets. However, as I'm reading and currently understanding what people have been saying, if for example I make a salary of 10,000,000yen in 2011 and my overseas assets only add $10,000 to that, I don't pay tax (in Japan) on that $10,000. Correct?

                            However, if I make 20,000,000yen in 2011 then I must pay tax in Japan on that $10,000 in the US.

                            Have I got that right now?

                            Basically, if all of my income together isn't anywhere near 20,000,000 yen a year, I'm not expected to pay tax on my US money. Which would be fine and dandy, because my income isn't anywhere near 20,000,000yen a year.

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                            • Originally posted by Teacher101 View Post
                              5 million yen is $50,000, not $500,000.

                              @Morton, those numbers were an example, not my real asset holdings.


                              Like I said, I'll be happy to report anything they want to know about my overseas assets. However, as I'm reading and currently understanding what people have been saying, if for example I make a salary of 10,000,000yen in 2011 and my overseas assets only add $10,000 to that, I don't pay tax (in Japan) on that $10,000. Correct?

                              However, if I make 20,000,000yen in 2011 then I must pay tax in Japan on that $10,000 in the US.

                              Have I got that right now?

                              Basically, if all of my income together isn't anywhere near 20,000,000 yen a year, I'm not expected to pay tax on my US money. Which would be fine and dandy, because my income isn't anywhere near 20,000,000yen a year.
                              Basically, yes, you do have to pay tax on that hypothetical $10000 in the US.

                              If you have been here more than 5 years you must pay Japanese tax on your worldwide income, regardless of your total income. You do not have to declare your assets, unless asked, but must pay tax on any monies the assets have earned you. Even if you earn nothing in Japan but have an overseas income of any kind (salary, interest, share sales, bonds sales, inheritance etc) you have to pay Japanese tax.


                              If you earn more than 20,000,000 yen a year then, in addition to the above, you have to also declare your assets.


                              I suspect that in your case you should be filing a Japanese tax return every year and be paying more tax/juminzei/kenko hoken etc.

                              Comment


                              • Originally posted by Morton View Post
                                Basically, yes, you do have to pay tax on that hypothetical $10000 in the US.

                                If you have been here more than 5 years you must pay Japanese tax on your worldwide income, regardless of your total income. You do not have to declare your assets, unless asked, but must pay tax on any monies the assets have earned you. Even if you earn nothing in Japan but have an overseas income of any kind (salary, interest, share sales, bonds sales, inheritance etc) you have to pay Japanese tax.


                                If you earn more than 20,000,000 yen a year then, in addition to the above, you have to also declare your assets.


                                I suspect that in your case you should be filing a Japanese tax return every year and be paying more tax/juminzei/kenko hoken etc.
                                I'm also getting confused over the info that seems contrary at times here.

                                You say:
                                We have to pay tax on our worldwide income. But if I send 1million yen overseas to regular (very low % rate) savings account, that isn't 'income', right? But interest earned from it would be 'income', right? The 1m sent is FROM Japan and tax-paid, so shoot me for my simple logic, it would only be once again taxable in Japan in terms of interest it gained.

                                You say:
                                (And this totally baffles me with it's odd logic) We should pay tax on worldwide income (not assets i.e. the 1m sent from Japan), BUT we do not have to DECLARE assets (the 1m) unless asked?!? If the law is that we are taxable, why would it be OK to go years not declaring and then suddenly declare when 'asked'. And then, again, would we be talking the whole 1m (assets) and/or just any amount the 1m has earned?

                                Can anyone shed a bit more light on this maze of responses?

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