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Be wary of your investments -- the TAXMAN is watching

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  • Originally posted by Majestic View Post
    From the Dec 5th Japan Times:

    Undeclared foreign income focus of talks

    ..."Lacking investigatory power outside Japan, the agency is actively collecting information from its foreign counterparts on Japanese money invested abroad."

    http://www.japantimes.co.jp/text/nb20121205a1.html
    "Specifically, the agency aims to encourage voluntary income declarations by Japanese active in asset investment abroad by sending them questionnaires based on information provided by tax authorities in relevant countries about their undeclared interest and dividend income, among others."

    I imagine that does not include anyone here.

    Comment


    • Stage II send us lump sum tax payments in advance

      Two years ago I got tumbled. A transfer of 100,000 yen to an overseas savings account that would serve as a retirement package, put me on the radar. An innocent looking questionnaire asked if I had transferred funds, to this account and imported funds from another account. I explained my situation. I was told not to worry, as the tax authority just want to confirm, I am not a millionnaire hiding in Japan or transferring funds overseas.

      The simple questionnaire evolved into a six month paper trail that went back 15 years. I complied with all the requests and hid nothing. After the tax dept and two city ward offices had finished, penalizing, taxing, and applying late payment fines, my pension fund balance was 2 mill yen less.

      If I has lied or tried to cover up, I am convinced it would have been worse. The following year I brought all evidence o'seas income to the tax office and paid the additional tax on it. I thought, I am complying with the law, they have finished hounding me.

      Wrong! Last year I received the first of two lump sum tax bills for 84,000 yen, the second was paid last week. I questioned the legitimacy of these tax demands and was assured that I must pay. I hope that I will have these payments deducted from my tax return in March. I feel many foreigners who are having their retirement funds gouged by the tax office, will be levered out. I did not use a tax accountant. I am wondering have others experienced the up-front in advance payments?

      Comment


      • In all likelihood, the questionnaire was voluntary.

        If it was anything like the one I received from the local NTA office several years ago, ignoring it and ditching it into the trashcan like I did was probably what you should have done as well. On top of it, the spelling of the addressee was off - so I figured they were fishing.

        After that, nothing, nada ...

        One does not need to be purposely confrontational but it helps to understand the difference between what is voluntary and what is compulsory. Authorities tend to rely on the fact that the majority of people are well-trained to place both in the same category.

        Comment


        • Originally posted by O'Hanlon View Post
          Wrong! Last year I received the first of two lump sum tax bills for 84,000 yen, the second was paid last week. I questioned the legitimacy of these tax demands and was assured that I must pay. I hope that I will have these payments deducted from my tax return in March. I feel many foreigners who are having their retirement funds gouged by the tax office, will be levered out. I did not use a tax accountant. I am wondering have others experienced the up-front in advance payments?
          Unforrtunately, that's normal. They levy the lump sum advance payments when you have significant income (and therefore tax) that is not taxed at source. If you end up overpaying for the year, you get the difference back, of course (no interest or penalties on their side, obviously).

          If you can make a convincing argument that your future income is not going to be similar to past income (e.g. your main income is taxed at source and any additional income was a special, one time thing), you can ask to have the advance payments reduced or eliminated. Reduced is more likely.

          Been there.

          Comment


          • Originally posted by O'Hanlon View Post
            Two years ago I got tumbled. A transfer of 100,000 yen to an overseas savings account that would serve as a retirement package, put me on the radar. An innocent looking questionnaire asked if I had transferred funds, to this account and imported funds from another account. I explained my situation. I was told not to worry, as the tax authority just want to confirm, I am not a millionnaire hiding in Japan or transferring funds overseas.

            The simple questionnaire evolved into a six month paper trail that went back 15 years. I complied with all the requests and hid nothing. After the tax dept and two city ward offices had finished, penalizing, taxing, and applying late payment fines, my pension fund balance was 2 mill yen less.

            If I has lied or tried to cover up, I am convinced it would have been worse. The following year I brought all evidence o'seas income to the tax office and paid the additional tax on it. I thought, I am complying with the law, they have finished hounding me.

            Wrong! Last year I received the first of two lump sum tax bills for 84,000 yen, the second was paid last week. I questioned the legitimacy of these tax demands and was assured that I must pay. I hope that I will have these payments deducted from my tax return in March. I feel many foreigners who are having their retirement funds gouged by the tax office, will be levered out. I did not use a tax accountant. I am wondering have others experienced the up-front in advance payments?

            So you had 15 years of profit abroad that you failed to report as income to the NTA? And they found out about it because you told them voluntarily?

            Comment


            • Originally posted by Hijinx View Post
              So you had 15 years of profit abroad that you failed to report as income to the NTA? And they found out about it because you told them voluntarily?
              It doesn't sound like he had very much choice. It seems to me that if the NTA asks you questions you can't just tell them to get lost and mind their own business. It also seems like they have access to information in respect of income earned abroad and tax paid.

              To me the moral of the story is don't let liability pile up for 15 years by staying silent. It won't work so sort it out now on a voluntary basis.

              Comment


              • Originally posted by Brown Cow View Post
                It doesn't sound like he had very much choice. It seems to me that if the NTA asks you questions you can't just tell them to get lost and mind their own business. It also seems like they have access to information in respect of income earned abroad and tax paid.

                To me the moral of the story is don't let liability pile up for 15 years by staying silent. It won't work so sort it out now on a voluntary basis.
                He transferred a fairly small amount of money which for reasons unknown was brought to the attention of NTA. So why was NTA interested in such a small amount? Perhaps it had something to do with the way the funds were moved or perhaps the questionnaire was something sent out as a matter of policy. (My local tax office helps me prepare my J-return and when asked if I have any overseas income to declare I simply say no.)

                However, it doesn't appear NTA knew about the overseas assets until the guy told them.

                Comment


                • Originally posted by Ken44 View Post
                  (My local tax office helps me prepare my J-return and when asked if I have any overseas income to declare I simply say no.)
                  Is it only me who thinks people sound like such imbeciles when they replace Japanese with J-? I mean J-return for Japanese tax returns? Really?

                  Comment


                  • Originally posted by corned View Post
                    Is it only me who thinks people sound like such imbeciles when they replace Japanese with J-? I mean J-return for Japanese tax returns? Really?
                    Whichever floats your banana-boat, nutfluffer.

                    Comment


                    • Originally posted by corned View Post
                      Is it only me who thinks people sound like such imbeciles when they replace Japanese with J-? I mean J-return for Japanese tax returns? Really?

                      Is it only me who thinks the "Really?" interrogative needs to be out to rest? So overdone, that is.

                      Comment


                      • Originally posted by Hijinx View Post
                        Is it only me who thinks the "Really?" interrogative needs to be out to rest? So overdone, that is.
                        Really is overdone? Really?

                        Comment


                        • Originally posted by corned View Post
                          Really is overdone? Really?

                          Hehe, I saw that one coming.

                          Comment


                          • Originally posted by Hijinx View Post
                            So you had 15 years of profit abroad that you failed to report as income to the NTA? And they found out about it because you told them voluntarily?
                            Wrong! As the investigation continued they already had th
                            e information. They just gave me the opportunity to confirm or hang myself. I didnt have the choice to ignore their requests

                            Comment


                            • Originally posted by O'Hanlon View Post
                              Wrong! As the investigation continued they already had th
                              e information. They just gave me the opportunity to confirm or hang myself. I didnt have the choice to ignore their requests

                              But you had 15 years of profit you didn't report. Were you bringing this money back into Japan over the years?

                              Comment


                              • Originally posted by Ken44 View Post
                                He transferred a fairly small amount of money which for reasons unknown was brought to the attention of NTA. So why was NTA interested in such a small amount? Perhaps it had something to do with the way the funds were moved or perhaps the questionnaire was something sent out as a matter of policy. (My local tax office helps me prepare my J-return and when asked if I have any overseas income to declare I simply say no.)

                                However, it doesn't appear NTA knew about the overseas assets until the guy told them.
                                Yeah and he'd been transferring small or relatively small amounts for a long time. There's a pattern there. I'm surprised that somebody like you with permanent residency doesn't realise how under the microscope we are.

                                Most gaijin whether Engrish teachers or business people like me will be scrutinised far more as the world's countries are broke and as usual seek to obtain whatever they can get hold of from the productive. That includes people with savings etc that haven't been declared even if these are small compared to those of the bigger fish. That's the way the world works.

                                The elites and others like them get away, those on the lower scale don't pay tax - we pay the shortfall. We pay for everybody. Govts have spent like drunken sailors, banksters have robbed us and now we are going to pay - again. Don't be surprised if the average Engrish teacher who's doesn't have or is unlikely to get permanent residency yet is still regarded as a permanent resident for taxation purposes here after 5 yrs starts getting scrutinised more and audited.

                                The Japanese NTA aren't fools - they know gaijin have bank accounts back home and most don't say anything about it at tax time. In the case of permanent residents it's just a matter of time before more audits targeted at us take place. Govts always have money for what they want - and tax collection from the productive and those who save is their priority.

                                I reckon Ken you need to be a bit more realistic. You've obviously been here a long time and your continual 'No's to questions about money back home are gonna be viewed with suspicion in the future. You'd better be ready for more questions.

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