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Be wary of your investments -- the TAXMAN is watching

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  • Originally posted by Hijinx View Post
    Hmmm, I think I checked the Single box. But anyway, what's to keep someone from transferring enough funds into their J-spouse's account to avoid crossing the USD 10,000 threshold which requires you to report the account to the Treasury Department?
    The form asks if you have a "financial interest" in the account, so if you do then technically you should file. Luckily filing is easy, takes five minutes, and one 110 yen stamp.

    Comment


    • Originally posted by jtij View Post
      http://taxjustice.blogspot.jp/2012/0...automatic.html
      "FATCA: progress towards automatic information exchange"

      ...for example. Automatic information sharing between countries is also a future goal of the people who drafted the FATCA legislation, according to a paper written by one of them:

      http://papers.ssrn.com/sol3/papers.c...act_id=1969123
      I have found various references to similar agreements, as far as I know there is a similar agreement between the US, UK, Australia and Japan for "tax haven" identification or something. While an automated exchange between the tax authorities is currently not yet taking place, and apparently only occasionally income tax relevant information about individuals is exchanged, I think it is just a matter of time that it will start on a routine basis. Such a routine exchange, not only on request, is clearly mentioned in several tax treaties Japan has with other nations, such as the US. In this case the NTA will become aware of previously non-disclosed income abroad and will for sure collect related taxes at least 5 years backward. If I would have such income and would have the intention to stay longer in Japan, I would take action, before it is too late.

      Comment


      • Originally posted by Plats View Post
        The form asks if you have a "financial interest" in the account, so if you do then technically you should file. Luckily filing is easy, takes five minutes, and one 110 yen stamp.
        Yes, technically, but the point I'm trying to get at is: how would Treasury know? I certainly doubt the NTA is in the habit of sharing it's citizens' bank info with foreign countries if they don't owe taxes in a particular foreign country.

        Comment


        • The most detailed description and analysis (160 pages) of the current practice of tax related information exchange between Japan and other nations I have come across so far. It goes down to the number of staff the NTA has dedicated to certain jobs for this purpose. Was published in 2011, should be up to date.

          Global Forum on Transparency and Exchange of Information for Tax Purposes Peer Reviews: Japan 2011

          This publication reviews the quality of the Japan's legal and regulatory framework for the exchange of information for tax purposes, as well as its implementation and effectiveness.
          http://www.keepeek.com/Digital-Asset...89264126718-en

          Comment


          • It was a sad read

            Originally posted by chainbolt View Post
            The most detailed description and analysis (160 pages) of the current practice of tax related information exchange between Japan and other nations I have come across so far. It goes down to the number of staff the NTA has dedicated to certain jobs for this purpose. Was published in 2011, should be up to date.



            http://www.keepeek.com/Digital-Asset...89264126718-en
            I had found this but didn't read it, but then when you posted the link I decided to. It is very detailed -- and scary. Its authors obviously are strongly biased to making the world a place where all governments cooperate so that every possible yen or peso of tax can be retrieved -- and then used to backstop the rising yen!!! DAMN! Why not use those available trillions to directly reduce debt!!! The website describes very clearly how many tax agencies are getting in sync. Even Luxembourg has "fallen." The Swiss are sort of holding out. In short, unless you are able to physically transfer money (in a suitcase?) without detection (highly unlikely), it seems you can be tracked. It would seem that "offshore" no longer has any meaning, does it? BTW, there are reports for many other countries, too.
            -----------------------------------------------------------------------------------------------------
            Anyone savvy enough to answer this one? I suspect it will apply to many among us.

            Let's say you have stocks or an ETF offshore. You have blue chips so you figure their value will not fall much and over a longer term of 5-10 years. The value rises but you have not cashed them out so you do not attract any tax. One day you decide to move (back to the USA, back to Canada, back to the UK, back to Australia, France, etc.). JUST as you are moving, you transfer the funds to a bank account where you are moving with a view to using (encashing) some or all of the money for a car, furniture, a down payment on a house, etc. When you transfer the funds back, will you attract tax on the gains? If so, in Japan? In the other country? If you have surrendered your ARC, then you have indicated that you are leaving Japan, so can the NTA here come after you? If you are bringing money back into the country, can they tax that?

            I suppose this is a question for a tax pro.

            Comment


            • tightening the noose

              This may be news to some. If one is over this threshold, one must disclose all foreign held assets. It seems that at the bottom of the article, the date for implentation is January, 2014. It sucks!

              http://japantax.org/?p=4859

              Comment


              • Originally posted by Super Grover View Post
                This may be news to some. If one is over this threshold, one must disclose all foreign held assets. It seems that at the bottom of the article, the date for implentation is January, 2014. It sucks!

                http://japantax.org/?p=4859
                I hate this thread as it brings back so many bad memories. In saying all that I've been cleansed and won't mess up again.

                The above link is terrifying, potential prison sentences for non-reporting. I suspect that there is a lot of people here with assets (especially those who bought property in say Vancouver, London, Edinburgh years ago) well over that amount. My accountant has made me detail everything the last few years. It's a pain and I've moaned about it, saying it wasn't necessary. Glad I'm transparent now though.

                A lot of people have the potential to be badly hurt with this. Personally I can see myself leaving Japan a couple of years before I intend to cash some things in.

                Oh and when the yen starts to weaken more people are going to become liable.


                Personally I think I'll keep dividing my assets slowly between my children, initially cash until they are older. Then keep sending money to my own account. On holidays home physically take it out and physically place it in my kids' accounts via their grandparents/aunt/uncle. No paper trail or connection to me. My kids already have accounts with foreign addresses and with names different from their Japanese ones. I won't be avoiding tax as I'll just gradually be gifting my kids money.
                Last edited by Morton; 2012-06-05, 03:42 PM.

                Comment


                • Originally posted by Morton View Post
                  I hate this thread as it brings back so many bad memories. In saying all that I've been cleansed and won't mess up again.

                  The above link is terrifying, potential prison sentences for non-reporting. I suspect that there is a lot of people here with assets (especially those who bought property in say Vancouver, London, Edinburgh years ago) well over that amount. My accountant has made me detail everything the last few years. It's a pain and I've moaned about it, saying it wasn't necessary. Glad I'm transparent now though.

                  A lot of people have the potential to be badly hurt with this. Personally I can see myself leaving Japan a couple of years before I intend to cash some things in.

                  Oh and when the yen starts to weaken more people are going to become liable.


                  Personally I think I'll keep dividing my assets slowly between my children, initially cash until they are older. Then keep sending money to my own account. On holidays home physically take it out and physically place it in my kids' accounts via their grandparents/aunt/uncle. No paper trail or connection to me. My kids already have accounts with foreign addresses and with names different from their Japanese ones. I won't be avoiding tax as I'll just gradually be gifting my kids money.
                  You hate it? I hate it way more, as I started the damn thing! Cleansed? Well, that's one way of putting it.

                  Yeah, the article demonstrates the Absolute Power given to tax agencies. I mostly care about the rules and ramifications of repatriation of assets, though, -- and I am afraid to even ask any more! Many professional expats here who have stayed beyond five years will be subject to this reporting. And, if you've read the OECD link provided by Chainbolt, it suggests that certain countries will begin to freely exchange and request information. They are all Siths, I tell you!
                  Last edited by Super Grover; 2012-06-05, 04:51 PM.

                  Comment


                  • How does this work for investments made prior to entering Japan and receiving an ARC/New fangled card?
                    Far below the 50 million yen mark.

                    Any income/realised gains would be kept outside of Japan with the odd ATM/cash brought into the country.
                    I expect this doesn't matter and this should all be declared as an asset but if you're already paying tax in the source country then paying additional tax in Japan is counter-productive, especially when it's all from income derived from from outside of Japan, prior to entering and becoming a non-permanent resident.

                    When the Yen weakens it will be chaotic, are they going to rebate when the Yen strengthens again (if you're here long enough)?!

                    Comment


                    • Originally posted by Super Grover View Post
                      This may be news to some. If one is over this threshold, one must disclose all foreign held assets. It seems that at the bottom of the article, the date for implentation is January, 2014. It sucks!

                      http://japantax.org/?p=4859
                      Thank you for sharing the link. Very interesting. Another indication that they are indeed intensifying looking at income generated abroad. It has to be noted though that already now the reporting of all assets inside and outside of Japan is mandatory on a given form together with your tax return if your annual income is exceeding 20 MJPY. Interesting now that they request the new report from everybody, even if the to be reported asset is not generating any taxable income.

                      Comment


                      • Originally posted by Morton View Post
                        I'm no expert but I think that if you have filed returns they can go back 3 years. If you haven't filed returns they can go back 5. If you have been willfully dishonest they can go back 7.

                        If you're a typical salaried employee then you probably wouldn't have filed a return and possibly they will go back 5 years.


                        Here's one link. http://books.google.co.jp/books?id=4...ations&f=false
                        The post above is an essential piece of information that everybody (concerned) should carefully keep in mind. In this regard I received the attached e-mail from the Japanese CPA who is preparing my annual tax return:

                        Dear Sir

                        Status of limitation for the amendment by Tax Authority (Japan tax law Code 70):

                        Assumption
                        The taxpayer filed the income tax on time.
                        He did not file the amended return.
                        Tax authority did not audit the return.

                        General rule
                        The tax authority cannot adjust the tax liability after three years from the tax return due date if the taxpayer filed the tax return by the due date.

                        Under Fraud
                        The tax authority cannot adjust the tax liability after seven years from the tax return due date if the taxpayer filed the tax return by the due date.There are no details given for fraud, such as amounts.

                        Best regards,
                        As Morton stated, for those who do not file a tax return, because their employer is withholding income tax from their salary and/or their total taxable income is below the given threshold, the period the tax office will go back in case of an audit is 5 years, because that is the period the law gives for the state to claim taxes back, if no tax return has been filed. The 7 year period applies only in case of fraud, that is for example when documents have been falsified.
                        Last edited by chainbolt; 2012-06-17, 12:38 AM.

                        Comment


                        • rental property in canada

                          hey guys....
                          I will be hitting the magic 5 in about 2 years.
                          Will a $C500000 rental property with $C200000 mortgage be seen as a $C300000 asset by the Japanese government?
                          Apologies if this has been answered.
                          Fred

                          Comment


                          • Originally posted by shonanfred View Post
                            hey guys....
                            I will be hitting the magic 5 in about 2 years.
                            Will a $C500000 rental property with $C200000 mortgage be seen as a $C300000 asset by the Japanese government?
                            Apologies if this has been answered.
                            Fred
                            You would declare both assets and liabilities, so a $C500000 asset with a corresponding $C200000 liability.

                            Comment


                            • Thanks to all those who contributed information to this thread, despite the length (took ages to read it all) there is a lot of interesting reading here. My takeaway is to get wealthier but pay your taxes, or find a more favorable tax jurisdiction to reside in. Can't see the tax burden in Japan going down much at all in the years ahead, although the US and Europe plus most other westernized places may not be especially better.

                              Still one is curious if one would be audited for having offshore wealth alone, even if you were accurately paying all your taxes...

                              Here's a story about one way to move wealth around undetected! The old diamonds in the toothpaste trick...
                              http://www.talkgold.com/forum/r369582-.html

                              Comment


                              • Originally posted by fxgai View Post
                                Thanks to all those who contributed information to this thread, despite the length (took ages to read it all) there is a lot of interesting reading here. My takeaway is to get wealthier but pay your taxes, or find a more favorable tax jurisdiction to reside in. Can't see the tax burden in Japan going down much at all in the years ahead, although the US and Europe plus most other westernized places may not be especially better.

                                Still one is curious if one would be audited for having offshore wealth alone, even if you were accurately paying all your taxes...

                                Here's a story about one way to move wealth around undetected! The old diamonds in the toothpaste trick...
                                http://www.talkgold.com/forum/r369582-.html
                                Yes, amazingly, this thread has not had any dumb comments. Contributors have been careful and accurate.
                                This is just my personal opinion, but I think to protect and or conserve your wealth, you have to be willing to get on a plane and physically move money around or you have to really investigate many other possibilities. In actual fact, the taxation on Japanese stocks is not too bad, but the problem is that unless you're really good at picking winners, there are not so many to choose from in spite of the fact that the Nikkei has done not so badly.
                                I think the fact that this thread has been so quiet lately is a reflection of the lack of our own activity in the markets. Again, it's just my opinion, but I think we're in for far worse times than now. Maybe, if I'm correct, it will be a really good time to buy land and build a house.

                                There are many real estate markets that are so depressed. If I were young and a gambling man I would be looking at those markets and trying to find good properties to buy and fix up and then sell later. Or I'd be looking for a really good house for myself. For example, for anyone who's planning on staying in Japan permanently, I can't imagine there being a better time to buy a house.

                                Comment

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