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Be wary of your investments -- the TAXMAN is watching

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  • Originally posted by MadMax
    ... How would they know about the assets in nz, if you're not remitting money?
    In principle, they will not.

    But once you receive more than 20mm in income, you are required to provide a list of assets when you file your tax return – so you would be telling them about those assets.

    Comment


    • Originally posted by MadMax
      Question to those who have attracted the attention of the NTA: was your income above the standard tax rate, over 8 million?
      I do not know what the "standard tax rate" might be, or if "income" means "salary," but "yes" in my case.

      It is the remittances that attract attention.

      Comment


      • Originally posted by MadMax
        Question to those who have attracted the attention of the NTA: was your income above the standard tax rate, over 8 million?
        In my case my Japanese income is well below that but I still attracted attention...and my transactions were below 1 million but I must admit I did quite a few transfers or around the 8~900,000yen figure.

        Interestingly I got my PR 5 years ago...so it seems like it's collection time for the NTA.
        Surely there must be more profitable avenues...behaving in this manner will only scare away those who planned to add to the population pool.

        BTW, I apologise if this has been answered before but can anyone tell me what amount one can receive each year as gift money? And would that mean individually, so say a family or 3 could receive 3 times that?

        Comment


        • Originally posted by skimpy View Post

          Surely there must be more profitable avenues...behaving in this manner will only scare away those who planned to add to the population pool.
          Thats it there for me. To keep the wife happy I had possible long term plans to keep assets in Australia and do some sort of early retirement thing in Japan. This thread is like a real turn off for me. The possibility of inheritance tax also concerns me greatly.

          I wonder if there is a way to spend half the year in Japan without being a resident? Three month tourist visa's and some sort same day return flights to Korea might be in order.

          The fact the J gov is really stooping to this shows how well and trully f a r k ed things are now in Japan. The country is a shadow of its former self.
          Last edited by Dusty McNugget; 2011-09-04, 09:22 AM.

          Comment


          • I find myself approaching the 5 year mark. Although I would like to continue staying on I really can't see it happening. I would be interested to know if you agree with my thinking.

            I am 43, Australian non-resident status, staying in Japan on a spouse visa. Main purpose of stay in Japan is for the kids to attend regular J school and be raised as bi-cultural. I work as a business E instructor and do the weddings gig on the weekend. The problem comes with the investments in Aust, $1.3m in shares, $300k in term deposits, no property. At the moment I am only required to pay 10% withholding tax on the bank interest, the share income through dividends is not considered (probably wrong choice of words there), but also the imputation credits cannot be taken into account. I probably earn about 4m yen in Japan. I file 2 different tax returns which at the moment are independant of each other.

            Now, I realise that from the 5 year mark, my worldwide income will need to be disclosed if I stay in Japan. Would this mean the income that I am required to declare on the Aust tax return, ie $18000 in interest earnt of which $1800 tax is paid, or would I also need to disclose all the income earned in Australia, ie include the dividends, with the imputation credits?

            I realise that I will need to get professional advice on it, but just looking for others opinions first.

            Thanks a lot.

            Comment


            • Originally posted by shamar View Post
              I find myself approaching the 5 year mark. Although I would like to continue staying on I really can't see it happening. I would be interested to know if you agree with my thinking.

              I am 43, Australian non-resident status, staying in Japan on a spouse visa. Main purpose of stay in Japan is for the kids to attend regular J school and be raised as bi-cultural. I work as a business E instructor and do the weddings gig on the weekend. The problem comes with the investments in Aust, $1.3m in shares, $300k in term deposits, no property. At the moment I am only required to pay 10% withholding tax on the bank interest, the share income through dividends is not considered (probably wrong choice of words there), but also the imputation credits cannot be taken into account. I probably earn about 4m yen in Japan. I file 2 different tax returns which at the moment are independant of each other.

              Now, I realise that from the 5 year mark, my worldwide income will need to be disclosed if I stay in Japan. Would this mean the income that I am required to declare on the Aust tax return, ie $18000 in interest earnt of which $1800 tax is paid, or would I also need to disclose all the income earned in Australia, ie include the dividends, with the imputation credits?

              I realise that I will need to get professional advice on it, but just looking for others opinions first.

              Thanks a lot.
              They will tax you on any interest earned on investments in Australia, If you have paid Australian non-residence tax on your income, they will charge 10%. If no tax paid 20%, Again if your total earnings from overseas pushes you into a higher tax bracket the percentage will increase. I can only comment on my own experience, having nailed by the NTA and then the local ward office.

              Comment


              • tracking foreign residents

                During Obon, I heard of another 9 year plus foreigner in Nagano, who recently got the innocent sounding questionnaire on transfer of funds. A second follow-up letter has asked him to disclose all foreign interest earning accounts. He does not earn over 8 mil. I am convinced they are tracking and trawling the foreign residents. He underestimates what lies ahead.

                Comment


                • skimpy - the gift tax kicks in at JPY 1,100,000 per year per individual.

                  shamar - the NTA will view your foreign dividends and interest as taxable income. You should receive a credit for any taxes paid to the ATO. If I'm not mistaken you do not receive any imputation credit here in Japan, but I could be wrong on this. Some interesting info regarding the Japanese view of imputation credits on page four of this article here > www.rikkyo.ne.jp/grp/kitahara/NO2_kazei_0925.doc And yes, with A$1.6 mil in assets, you should crack the wallet open and get a tax pro to chime in on this.

                  Comment


                  • Originally posted by Majestic View Post
                    skimpy - the gift tax kicks in at JPY 1,100,000 per year per individual.
                    Thanks Majestic, that's the amount I thought I was entitled to.

                    It would be interesting to know if any permanent residents have been audited within 4 years or so of becoming PRs. You could argue that the NTA allow you time to sort out your affairs but once the 5 years are up, they figure, 'OK, we've given you enough time and you haven't yet fallen inline so it's time we make you do so.'

                    Comment


                    • Originally posted by shamar View Post
                      ... my worldwide income will need to be disclosed if I stay in Japan.
                      It would seem to me that nearly every non-Japanese here has some sort of bank account or investment in their native country (or offshore), but very few of us declare the little(?) bits of interest earned. If you eventually begin to earn significant interest, it seems too late to declare it here -- the Jp tax people might easily ask how long you have had the account, and ask for complete documentation, which might be very hard to organize.

                      Up till recently, tax and financial organizations in one country would not cooperate with requests from another country to investigate someone unless there is a suspected crime invovled. The exception to this would seem to be the US (and to a lesser extent Germany and UK) who have recently put the squeeze on Switzerland, which is famous for legal and semi-legal money laundering. The US (and maybe UK/Ger), had leverage by threatening sanctions on Swiss banks.

                      Otherwise I could imagine countries cooperating when they both have something to gain (significant numbers of citizens living in each other's countries), but I cant imagine any cooperation where there is no mutual gain, and one country does not have leverage over the other.

                      I wonder if Australia might fall into the mutual gain category with Japan?

                      I wonder where this leaves small faraway offshore locations like IOM and Channel Islands? They certainly wouldnt give out customer data to a foreign government unless compelled to do so, and I dont think they are within economic sphere of influence of Jp (i.e., they are not strictly part of the UK).

                      Any opinions?

                      Comment


                      • Originally posted by skimpy View Post

                        It would be interesting to know if any permanent residents have been audited within 4 years or so of becoming PRs. You could argue that the NTA allow you time to sort out your affairs but once the 5 years are up, they figure, 'OK, we've given you enough time and you haven't yet fallen inline so it's time we make you do so.'
                        Became PR in late 90s. Never had an audit, although I did get a friendly letter from tax office 6 years ago asking about a large inward transfer (17mill to buy a house). They didnt ask about tax (transfers to buy a house seem to be (or have been) allowed. Things seem to have got more strict over the last 3 or 4 years.

                        Comment


                        • Originally posted by erice
                          a friend pointed me to this thread

                          been in a japan for 14 years

                          lots of jobs, currently own small eng. school in a small remote? city

                          got PR 5 years ago

                          3 weeks ago we got a call that we were to be audited and to have ALL our books and banking records available...

                          we visited an accountant, he frowned when he looked at our books and scratched his head when he looked at our bank statements...

                          he called the tax office and rescheduled the visit/audit so he could be there too and my wife could better sort our books

                          the day of the audit a single guy came and went through the books pointing out lots of errors and chasing stationary purchases from the 100yen shop

                          he had a stab at the OS bank statements but couldn't read much english so he asked me to take him through them

                          he asked if that was all the bank accounts, i said yes

                          he looked into his folder and asked about a small account with a large trading bank that had recently been closed

                          i pointed out those papers in my binders and apologized that i thought he only meant current accounts from normal banks

                          he eyed my folders and asked to take them back to his office to for photocopying, promising to return them the next day

                          i thought this was a bit of a crucial moment where i would be judged an errant sheep, to be gently nudged back on track

                          or a wolf to be slaughtered, skinned and hung out to dry as a warning to wolves everywhere...

                          so i said yes, take the folders

                          he said that he was new to this too, he would try to put it all together in his office, he would be back

                          but that as i was self employed and had filed returns they would be looking for me to pay back taxes for the last 3 years on OS earnings

                          my wife's OS income though would be back taxed for 5 years

                          our next appointment is next week

                          the friend who pointed me to this thread came to japan about the same time

                          has earned about the same

                          has sent about the same home

                          and got PR 5 years ago too

                          his 1st audit visit is this week

                          me thinks a pattern is emerging
                          This is really informative, thanks for sharing. It'll be interesting to hear what happens - hopefully all positive from your persective.

                          Can I ask which country your OS income is from, and your friend whose audit is coming up?

                          Also what sort of amounts are you talking about? Are you also sending money internationally either way?

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                          • Thanks for the advice, it just seems so easy to live here up to 5 years, then it gets all mucked up! I wish you all well in your pursuits.

                            Comment


                            • I asked the auditor of my case if it was due to my PR status that I was being investigated to which he responded, NO. He went on to say that it doesn't matter what stamp you have in your passport, if you've been living in Japan for over 5 years, you are considered PR, and therefore all foreign income must be declared.

                              Comment


                              • Originally posted by jrp View Post
                                This is really informative, thanks for sharing. It'll be interesting to hear what happens - hopefully all positive from your persective.

                                Can I ask which country your OS income is from, and your friend whose audit is coming up?

                                Also what sort of amounts are you talking about? Are you also sending money internationally either way?
                                I take it erice had second thoughts about posting and deleted his message. If so, I felt the same when I was posting last year. I hope he posts to let us know how it pans out.

                                Comment

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