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Be wary of your investments -- the TAXMAN is watching

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  • Quick update fwiw

    I am done. All paid. Many inkan imprints on many pages later, I was told, "We are sorry. Japan's tax rates are so high. We are very sorry." Then a few minutes later, "If you come in again in January (this month!) XYZ-san can help you with 2010 taxes. It will be better to get it done early this year, so we do not have to see you at the end of the year. If you come in before the end of January, we can spend a day with you. When you come in SG-san, please calculate exchange rates yourself. It will make things much faster." Managing to keep my senses, I thanked them for trying to help me. In a word, it seems that for some of us the first audit is just the beginning.

    Again, does anyone know of a J. firm that can trade on all Canadian markets? And, I am still looking into the exact rules, but it is my understanding from the tax auditors that the low tax rate applies to only certain listed stocks. They said TSE (Tokyo) and NYSE stocks could attract the lower tax rate? Anyone up to date on this?

    Cheers

    Comment


    • Very interesting info, there's a book in here somewhere for the enterprising financial writer who writes it.

      Comment


      • SG and the Marusa no Onna

        The tale has come to its woeful end. In a room lit only by a flickering fluorescent light we see SG seated before a small metal desk. A severe looking Japanese woman and 2 male cronies are seated opposite him.

        The woman points to several locations on a legal document and says "Hanko here, here and here!"

        SG, looking old and worn beyond his years opens his hanko case with shaking hands, removes his hanko and then in a swift, decisive motion whips out a small knife, slices the palm of his hand, dips the hanko into the blood welling up and in an act of defiance stamps the indicated locations on the document.

        Wrapping his hand in a handkerchief and standing up to leave, he retorts "You've got your blood! Happy now?"

        The stone, cold _____ just looks at him and replies "I hope you've stocked up on KY Jelly. We're not finished with you yet!"

        Comment


        • Regrettably, there isn't a woman to be seen, severe or otherwise. Were I to whip out a knife and carry on, that would be the stuff of Bulwer-Lytton. It has added a few wrinkles to this youthful face. Now I have to wait for the city to send me its bill. So I had to pay "back taxes," failure to file penalties," "lateness penalties," (one year waived) and still must pay the city's 10%. I already pay the max (apparently) for the other payments, so no additional social payments required.

          Still I haven't found an inexpensive broker in Japan who can trade on the Toronto Venture Exchange, Vancouver S.E. and the NYSE. He must be out there! Next is to find out whether trades made here on overseas exchanges receive favourable taxation. I haven't had the time and it is not as easy to find out as I had been hoping.

          Majestic, you seem to have quite a bit of knowledge hidden in your grey cells, so do you have any ideas for a poor (numerous senses), hapless yet gentle, purple ex-superhero?
          Last edited by Super Grover; 2011-02-03, 10:53 AM. Reason: add word

          Comment


          • Originally posted by edin“ú–{ View Post
            The tale has come to its woeful end. In a room lit only by a flickering fluorescent light we see SG seated before a small metal desk. A severe looking Japanese woman and 2 male cronies are seated opposite him.

            The woman points to several locations on a legal document and says "Hanko here, here and here!"

            SG, looking old and worn beyond his years opens his hanko case with shaking hands, removes his hanko and then in a swift, decisive motion whips out a small knife, slices the palm of his hand, dips the hanko into the blood welling up and in an act of defiance stamps the indicated locations on the document.

            Wrapping his hand in a handkerchief and standing up to leave, he retorts "You've got your blood! Happy now?"

            The stone, cold _____ just looks at him and replies "I hope you've stocked up on KY Jelly. We're not finished with you yet!"
            Hey, what would happen if one were to use a colour other than red? Can we use black ink? Blue? Kitty Chan pink?
            Truth be told, my "team" looked pretty ragged themselves. Their boss (who sat in one day) seemed pretty genki, though.

            Ultimately, what is behind our problems in Japan and over in the USA is, imo, moral hazard. There seems to be no moral compass. But I shan't become a dark, drunk Russian. Happy Year of the Rabbit!
            Last edited by Super Grover; 2011-02-03, 10:58 AM.

            Comment


            • Funny, the tax guys also left me with the impression that they would be carefully watching over me from now on after the audit.

              I agree the entire procedure would be so much less painful if the tax office employed hot chicks.
              Oooh, the tax office is coming again today! Hurray!
              Hell, they'd probably even collect more with dumb and horny guys disclosing more hidden taxable assets to impress the girls.

              Comment


              • If you've ever made a "mistake" on your taxes or been forced to declare bankruptcy or in some way tripped an audit or investigation of your finances prepare yourself for the joys of the yearly audit and the added scrutiny that will come your way for the next 5-10yrs. Best stock up on tranks and get used to bending over.

                Comment


                • Tax accountant?

                  Do any of you know
                  a) a good tax accountant
                  b) how much they charge
                  c) if an accountant's services is a tax deduction?

                  S.G. geting ready for "Round 2"

                  Comment


                  • And 3 thru 10 as well? These tax people are like a chronically recurring disease. You don't want it but it keeps coming back for another round. Wish I could help. "I'm a publisher SG, not a tax accountant."

                    Comment


                    • So to sum up this wonderfully informative thread:

                      You pay taxes on INCOME (money you earned whatever / wherever the source is) not on ASSETS (property, bond, stocks etc. you already have/own) if you are a resident of Japan (which you will be after living here for 5 years).
                      Read the tax treaty your home country has with Japan as your home country's tax authorities might be all too happy to disclose financial information about you (information that you gave them when / if you filed taxes back home), but that's all the NTA can go on.

                      If you have assets or income anywhere in the world (that you've paid tax on locally already) it's up to you whether you disclose it, the burden of proof is on the NTA (they have to find it to prove that it exists) not on you, why would you do the legwork for them.
                      However if you earn more than 20mill/year from ALL (worldwide) sources combined you (technically) have to disclose ALL your assets the NTA.

                      Never volunteer information that they already don't know or have about you and/or your assets.
                      I do not believe that banks in your home country would disclose personal information to a foreign entity (prove me wrong with first hand example).

                      Whether you have assets in Japan that can be seized or liened makes a big difference in how much leverage the NTA has against you. They don't want you to leave, they want you to pay.
                      If there is nothing they can take from you (you have no pressure points) they will have a lot less interest in you.
                      Of course they can garnish your wages but they need court order for that.
                      If you have to have a property in Japan register it under your wife's (provided you trust her enough) or
                      (children's) name.


                      A couple of, admittedly simple, ways you can stay under the radar.

                      It's been the law now for many years that cash transactions in excess of $10,000 are reported to your local tax authorities (this is a worldwide thing, the rule applies to EU member countries too not just US/Canada/Japan) so spread out the transfers over the year / use your spouse to share the load.
                      Cash under $10, 0000 or equivalent can be taken out of most countries without the need to declare it (it's a fact), so whenever you visit your home country take that much with you (of course have it deposited in smaller amounts). If you have friends, family members visiting you in Japan ask them to take back home the same amount for you (if you have funds available).
                      Open a bank account with a bank that has branches both in Japan and in your home country.
                      Get a credit card with a supplementary card for your trusted associate back home. He / she can make a cash advance, under $3,000 back home, you pay off the balance in Japan. Do it as many time in a year as you feel comfortable (there will be a service charge, check how bad it is, some banks charge a conversion fee, a % of the converted amount, when converting funds from one currency to another).
                      Visit Hong Kong on a long weekend, can take $10,000 with you legally and deposit it in your bank (if they have a branch there) over the course of the 3 days.
                      Send a supplementary card of your Japanese bank account to your trusted associate back home.
                      They can withdraw money back home; you can deposit money here using the same account.
                      Get international money order, under $3,000 pay cash for it and send it home.
                      Change banks every couple of years emptying and closing your old account.

                      Some of these actions will leave a paper trail, however the purpose is NOT tax evasion, as you have paid (didn't you?) tax on your earnings in Japan already, but simply not to attract attention to yourself by making a large transaction when taking the money out of Japan for whatever reason. It is really nobody's business what you do with your money even if the NTA thinks otherwise.

                      Limit the personally identifiable information that you volunteer.
                      Do not tell City Hall about your place of birth, they only know what you tell them.
                      Do not let anyone make photocopy of your documents (not even City Hall) fill out forms by hand, do not disclose social security/insurance numbers, do not convert a foreign driver's license, get your original Japanese one.
                      Keep the paper trail to the minimum. Just because someone asks you for information it doesn't mean you have to provide it.
                      Just because you are paranoid it doesn't mean they are not after you.

                      Also, Japanese authorities tend to punish one to warn hundred others, this thread has attracted almost 5000 views already.
                      Last edited by SantaKraut; 2011-02-08, 02:10 PM.

                      Comment


                      • Just a few commentscc..

                        Originally posted by SantaKraut View Post
                        c If you have to have a property in Japan register it under your wife's (provided you trust her enough) or (children's) name.
                        But they would have needed to have sufficient income to purchase that property – and if they didnft, then they are at risk of audit and penalty for not paying taxes on their presumed income. Alternatively, you are guilty of trying to hide assets.

                        Open a bank account with a bank that has branches both in Japan and in your home country.
                        That way both tax authorities will obtain the full picture – as the banks will report to both authorities. Personally, I would look for banks that do not have branches or any other business in the other country.

                        Change banks every couple of years emptying and closing your old account.
                        Presumably, these will be rather large withdrawals and redepositfs and will most definitely be reported. I would find one I like and stick with it, or simply open an additional account in another bank.

                        I would be looking for ways to not leave a paper trail, but if one is to be left – I wouldnft want it left across multiple countries.
                        Last edited by TJrandom; 2011-02-08, 02:24 PM.

                        Comment


                        • Originally posted by SantaKraut View Post
                          So to sum up this wonderfully informative thread:

                          You pay taxes on INCOME (money you earned whatever / wherever the source is) not on ASSETS (property, bond, stocks etc. you already have/own) if you are a resident of Japan (which you will be after living here for 5 years).
                          Read the tax treaty your home country has with Japan as your home country's tax authorities might be all too happy to disclose financial information about you (information that you gave them when / if you filed taxes back home), but that's all the NTA can go on.

                          If you have assets or income anywhere in the world (that you've paid tax on locally already) it's up to you whether you disclose it, the burden of proof is on the NTA (they have to find it to prove that it exists) not on you, why would you do the legwork for them.
                          However if you earn more than 20mill/year from ALL (worldwide) sources combined you (technically) have to disclose ALL your assets the NTA.

                          Never volunteer information that they already don't know or have about you and/or your assets.
                          I do not believe that banks in your home country would disclose personal information to a foreign entity (prove me wrong with first hand example).

                          Whether you have assets in Japan that can be seized or liened makes a big difference in how much leverage the NTA has against you. They don't want you to leave, they want you to pay.
                          If there is nothing they can take from you (you have no pressure points) they will have a lot less interest in you.
                          Of course they can garnish your wages but they need court order for that.
                          If you have to have a property in Japan register it under your wife's (provided you trust her enough) or
                          (children's) name.


                          A couple of, admittedly simple, ways you can stay under the radar.

                          It's been the law now for many years that cash transactions in excess of $10,000 are reported to your local tax authorities (this is a worldwide thing, the rule applies to EU member countries too not just US/Canada/Japan) so spread out the transfers over the year / use your spouse to share the load.
                          Cash under $10, 0000 or equivalent can be taken out of most countries without the need to declare it (it's a fact), so whenever you visit your home country take that much with you (of course have it deposited in smaller amounts). If you have friends, family members visiting you in Japan ask them to take back home the same amount for you (if you have funds available).
                          Open a bank account with a bank that has branches both in Japan and in your home country.
                          Get a credit card with a supplementary card for your trusted associate back home. He / she can make a cash advance, under $3,000 back home, you pay off the balance in Japan. Do it as many time in a year as you feel comfortable (there will be a service charge, check how bad it is, some banks charge a conversion fee, a % of the converted amount, when converting funds from one currency to another).
                          Visit Hong Kong on a long weekend, can take $10,000 with you legally and deposit it in your bank (if they have a branch there) over the course of the 3 days.
                          Send a supplementary card of your Japanese bank account to your trusted associate back home.
                          They can withdraw money back home; you can deposit money here using the same account.
                          Get international money order, under $3,000 pay cash for it and send it home.
                          Change banks every couple of years emptying and closing your old account.

                          Some of these actions will leave a paper trail, however the purpose is NOT tax evasion, as you have paid (didn't you?) tax on your earnings in Japan already, but simply not to attract attention to yourself by making a large transaction when taking the money out of Japan for whatever reason. It is really nobody's business what you do with your money even if the NTA thinks otherwise.

                          Limit the personally identifiable information that you volunteer.
                          Do not tell City Hall about your place of birth, they only know what you tell them.
                          Do not let anyone make photocopy of your documents (not even City Hall) fill out forms by hand, do not disclose social security/insurance numbers, do not convert a foreign driver's license, get your original Japanese one.
                          Keep the paper trail to the minimum. Just because someone asks you for information it doesn't mean you have to provide it.
                          Just because you are paranoid it doesn't mean they are not after you.

                          Also, Japanese authorities tend to punish one to warn hundred others, this thread has attracted almost 5000 views already.
                          Really, 5000 views? Wow!
                          A fair summary. You forgot "Leave Japan after 5 years."
                          IF you already owe and are being investigated, then finish asap to save money. If you feel you do not owe, then I would say, force them to get a court order for every single procedure. One of your suggestions is just what I was thinking about this morning: close out an account and open a new one. I am also keeping my money out of the J. bank, too.

                          Comment


                          • Originally posted by SantaKraut View Post
                            It is really nobody's business what you do with your money even if the NTA thinks otherwise.


                            Me: "It is really nobody's business what I do with my money even if you NTA people think otherwise."

                            NTA: "We think otherwise."


                            Somehow, this part of what you say (mostly interesting and to be devoured slowly and carefully) does not fill me with confidence. Tax authorities are generally not that big on thinking your money is your business.

                            Comment


                            • Originally posted by Super Grover View Post
                              ... I am also keeping my money out of the J. bank, too.
                              A friend with a pub - never uses banks, and always manages to "just break even" on his business, so pays a minimal amount in taxes. Yet he managed to pay for a house in cash a couple of years back.

                              With bank interest rates at miniscule rates - safety from physical theft of cash seems to be the only thing that a J bank provides.

                              Comment


                              • Originally posted by SantaKraut View Post
                                Never volunteer information that they already don't know or have about you and/or your assets.
                                I do not believe that banks in your home country would disclose personal information to a foreign entity (prove me wrong with first hand example).
                                While this is not Japan this shows that governments around the world are getting more serious about tax cheats and are actually becoming proactive in finding them.

                                Switzerland agreed to process a request for account information of 4450 US citizens.

                                http://www.swissinfo.ch/eng/politics...tml?cid=684242

                                Don't make enough, but know a really rich tax cheat? Let him fund your retirement.

                                Read about halfway down the first article.

                                http://www.vitrolenta.com/finance/ta...-response.html

                                Germans buying stolen data.

                                http://www.smh.com.au/world/merkel-h...0203-ndmj.html

                                Belong to an Italian Yacht Club?

                                http://www.businessweek.com/magazine...4010879756.htm

                                In first world countries government revenues are going down (high unemployment) and their expenses are going up (boomers getting old and retiring). In the future it's going to become increasing harder to hide your income if you are a low/non paying higher income earner, especially if you live at your income level.

                                Comment

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