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Be wary of your investments -- the TAXMAN is watching

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  • Originally posted by Brown Cow View Post
    You don't have to prepare a schedule of assets if the portfolio is less than 50 million but you still have to declare the income generated on your tax return. In other words, you are exempted providing the details but you still have to declare the bottom line.
    And really, that's the crux of this thread: how much does that bottom line need to exceed before it gets noticed?

    Comment


    • Originally posted by Hijinx View Post
      50 million yen? No one here on GP needs to worry about that requirement.
      Well, I'm assuming the Salary threshold still stands as well, which is, I believe, JPY 20M. That might bring a few more into the net.

      JPY 50M is around US$500,000 dollars, depending on exchange. It's not inconceivable that expats in Japan would have those kind of assets, particularly if they own property.
      Last edited by iago; 2012-12-18, 08:52 AM.

      Comment


      • Originally posted by iago View Post
        Well, I'm assuming the Salary threshold still stands as well, which is, I believe, JPY 20M. That might bring a few more into the net.

        JPY 50M is around US$500,000 dollars, depending on exchange. It's not inconceivable that expats in Japan would have those kind of assets, particularly if they own property.

        Sure, but what I meant is that the people on GP are very unlikely to have that kind of cashews.

        Comment


        • Originally posted by Hijinx View Post
          Sure, but what I meant is that the people on GP are very unlikely to have that kind of cashews.
          Yes, out of the four or five people left on GP, for those who actually live in Japan it probably is still a high threshold.

          Comment


          • Originally posted by iago View Post
            Well, I'm assuming the Salary threshold still stands as well, which is, I believe, JPY 20M. That might bring a few more into the net.

            JPY 50M is around US$500,000 dollars, depending on exchange. It's not inconceivable that expats in Japan would have those kind of assets, particularly if they own property.
            I saw a speculative rumour in a Japanese article that suggested the 50M yen threshold was just an initial step. As the second act they may lower the threshold to 30M etc, who knows. Also if the value of the yen were to go down as seems to be the talk at the moment (one has to stress the "at the moment") that will put more at risk as well.

            For the time being, my understanding is so long as one has assets less than 50M yen equivalent overseas, one only needs to report the interest income etc, not the specific location of those assets. (Of course some might opt to do less than this even.)

            Long term, if one is planning to stick around in Japan even if/when the pooh really hits the fan with the public debt situation, considering options to keep the details of foreign assets outside the net of the authorities would seem prudent. The massive public debt can probably never be paid off (it's only going to get worse in the months ahead under PM Abe) so logic says that the debt will one day either be evaporated with high inflation, or via massive wealth grabs. PM Abe sounds like he'd favour the inflation path (which could precipitate a JGB crisis), whereas other politicians speaking ahead of the election spoke of the 1,500 trillion yen of assets held by the Japanese public as if those were for politicians to invest... scary stuff.

            Inflation or wealth grabs, having some assets overseas safely outside of the net makes sense.

            Comment


            • Originally posted by fxgai View Post
              For the time being, my understanding is so long as one has assets less than 50M yen equivalent overseas, one only needs to report the interest income etc, not the specific location of those assets. (Of course some might opt to do less than this even.)
              Not quite. There's an annual income threshold as well:

              Those whose total income excluding retirement income exceeds 20,000,000 yen are required to submit "
              Itemized statement of debts and assetsh, which details the type, quantity, and value of assets, and amount of debts, etc. as of December 31...


              Comment


              • Originally posted by fxgai View Post
                I saw a speculative rumour in a Japanese article that suggested the 50M yen threshold was just an initial step. As the second act they may lower the threshold to 30M etc, who knows. Also if the value of the yen were to go down as seems to be the talk at the moment (one has to stress the "at the moment") that will put more at risk as well.

                For the time being, my understanding is so long as one has assets less than 50M yen equivalent overseas, one only needs to report the interest income etc, not the specific location of those assets. (Of course some might opt to do less than this even.)

                Long term, if one is planning to stick around in Japan even if/when the pooh really hits the fan with the public debt situation, considering options to keep the details of foreign assets outside the net of the authorities would seem prudent. The massive public debt can probably never be paid off (it's only going to get worse in the months ahead under PM Abe) so logic says that the debt will one day either be evaporated with high inflation, or via massive wealth grabs. PM Abe sounds like he'd favour the inflation path (which could precipitate a JGB crisis), whereas other politicians speaking ahead of the election spoke of the 1,500 trillion yen of assets held by the Japanese public as if those were for politicians to invest... scary stuff.

                Inflation or wealth grabs, having some assets overseas safely outside of the net makes sense.
                I do not want to hijack my own thread, but I fear the recent election bodes rather badly for some.
                1) As the yen is deliberately eroded, assets held abroad will more easily reach the threshold, forcing some people to declare their whereabouts.
                2) Inflation is as much our enemy as deflation given our massive debt. I pleaded with my better half to retire earlier this year. I fear our retirement income is going to take a hit. MUST make it up by choosing stocks well. Looking at transportation (a little late), LNG (a little late), potash (again) and EWY (ishares Korea). Bottom line: for people who intend to leave Japan relatively soon, they need to be on top of their game (unless they're mega rich!).
                Last edited by Super Grover; 2012-12-18, 11:18 AM.

                Comment


                • Originally posted by iago View Post
                  Well, I'm assuming the Salary threshold still stands as well, which is, I believe, JPY 20M. That might bring a few more into the net.

                  JPY 50M is around US$500,000 dollars, depending on exchange. It's not inconceivable that expats in Japan would have those kind of assets, particularly if they own property.
                  Is the JPY 50M a net value of the assets?
                  I have rentals with huge mortgages as the interest income is deductible.
                  Thank-you.
                  Fred

                  Comment


                  • Originally posted by shonanfred View Post
                    Is the JPY 50M a net value of the assets?
                    I have rentals with huge mortgages as the interest income is deductible.
                    Thank-you.
                    Fred
                    Gross.

                    You provide a statement of both assets and liabilities. Gross property value on one side, mortgage debt on the other.

                    Comment


                    • Originally posted by iago View Post
                      Used to be a requiring for anyone earning over JPY 20M to declare all assets and liabilities including those overseas. With changes introduced in 2012 this is being applied more broadly.

                      Discussed here:

                      http://www.expat-cafe.com/bbs/viewto...p?t=507&p=6825

                      Obviously, compliance is your choice.
                      Thanks for that link - very informative and timely too. I note that this requirement is new for 2012. The older, and still required filing for those earning over Y20M - only required asset & liability totals by category: cash, real estate, etc. I filed it routinely for 20+ years, and never indicated whether part of that cash or real estate value was held overseas, and never was asked either. I haven't seen the new form for over Y50M in assets - but presume it will not require bank names or account niumbers - which was the suggested requirement by one of our fellow GPers. Luckily, I will not face this as neither the Y20M nor the Y50M will apply to me going forward.

                      Comment


                      • Originally posted by TJrandom View Post
                        Thanks for that link - very informative and timely too. I note that this requirement is new for 2012. The older, and still required filing for those earning over Y20M - only required asset & liability totals by category: cash, real estate, etc. I filed it routinely for 20+ years, and never indicated whether part of that cash or real estate value was held overseas, and never was asked either. I haven't seen the new form for over Y50M in assets - but presume it will not require bank names or account niumbers - which was the suggested requirement by one of our fellow GPers. Luckily, I will not face this as neither the Y20M nor the Y50M will apply to me going forward.

                        In other words if your income isnft remotely close to Y20M it is unlikely NTA will be interested in you unless you draw attention to yourself.
                        Last edited by Ken44; 2012-12-19, 07:18 PM.

                        Comment


                        • ...................
                          Last edited by manoman; 2012-12-20, 12:41 PM.

                          Comment


                          • Originally posted by Ken44 View Post
                            In other words if your income isnft remotely close to Y20M it is unlikely NTA will be interested in you unless you draw attention to yourself.
                            It's unlikely that one's home is going to burn down too, but people pay for fire insurance anyway...

                            Not drawing attention to oneself while actually doing something significant is no easy or risk-less feat, is it not? Using a pair of highly leveraged margin accounts, one in Japan and one elsewhere is the best idea I've come up with.

                            Comment


                            • Originally posted by fxgai View Post
                              It's unlikely that one's home is going to burn down too, but people pay for fire insurance anyway...
                              Fire insurance is worth the expense when you consider the costs of a disaster. And if we`re talking investment property the cost of the policy can usually written off.

                              Originally posted by fxgai View Post
                              ...Not drawing attention to oneself while actually doing something significant is no easy or risk-less feat, is it not?
                              No it`s not and neither is owning investment property especially when your overseas.
                              Last edited by Ken44; 2012-12-22, 05:33 PM.

                              Comment


                              • Originally posted by iago View Post
                                Used to be a requiring for anyone earning over JPY 20M to declare all assets and liabilities including those overseas. With changes introduced in 2012 this is being applied more broadly.

                                Discussed here:

                                http://www.expat-cafe.com/bbs/viewto...p?t=507&p=6825

                                Obviously, compliance is your choice.
                                Very old news. This was already discussed in this thread. It's also a bit misleading how you put it:

                                - The reporting duty starts as of 1 January 2014.
                                - Every permanent tax resident has to report assets above 50 MJPY - not only those how have an annual taxable income above 20 MJPY.
                                - Actually: Anybody who earns more than 20 MJPY has already for years been obliged to report all assets together with his mandatory tax return.

                                I agree though: Another little stick that recommends compliance.

                                Comment

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