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Be wary of your investments -- the TAXMAN is watching

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  • Originally posted by Brown Cow View Post
    ... Nor do I believe that they can't get information either by demanding it from me or by asking tax authorities abroad for it.
    Maybe they can but how the fu-k would you know?

    Did you attempt to look into this?

    The last thing I want is NTA involved in my overseas business affairs if I can help it.


    Originally posted by Brown Cow View Post
    Looking at it as evenhandedly as possible I can see that although we all agree that double taxation is wrong, we are not so strict on claiming double relief/allowances. It could be argued that if you insist on being taxed separately on J and Non J income then you are in fact benefiting from two sets of allowances and reliefs. That could be seen as unfair..
    What are you going on about?
    Last edited by Ken44; 2013-03-10, 05:03 PM.

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    • Originally posted by Ken44 View Post
      What are you going on about?
      Never mind. If you don't understand , you don't understand.

      Comment


      • Originally posted by Brown Cow View Post
        Never mind. If you don't understand , you don't understand.
        You wrote, "It could be argued that if you insist on being taxed separately on J and Non J income then you are in fact benefiting from two sets of allowances and reliefs."

        How?

        There are no tax benefits which I use in Japan or the US that I roll over to the other.

        The incomes/write-offs are completely independent of each other.

        Comment


        • Originally posted by Ken44 View Post
          The incomes/write-offs are completely independent of each other.
          And you benefit from both. AN Other Japanese or AN Other American taxpayer doesn't - They get only one set of reliefs and allowances and then pay tax on their total income.

          But it is all moot. The point is not, Is it fair?. Certain aspects aren't, as Chainbolt pointed out. Rather the question is, Is it the law?. Beyond that the question is, Does the NTA have the wit, knowledge, resources and will to enforce it? You have judged that, in your particular case, the answer to that is a resounding No.

          Fine. Others may have formed a different judgement and others may have different circumstances.

          Comment


          • Originally posted by Brown Cow View Post
            And you benefit from both. AN Other Japanese or AN Other American taxpayer doesn't - They get only one set of reliefs and allowances and then pay tax on their total income.
            Well, that's not my fault.

            But then again how many gaijin teachers actaully have anything to declare?

            And those that do usaully aren't reporitng it.

            In fact I only know of one gaijin who delcares overseas income and that's only because she screwed up.

            Originally posted by Brown Cow View Post
            Does the NTA have the wit, knowledge, resources and will to enforce it? You have judged that, in your particular case, the answer to that is a resounding No.
            They can but I find it hard to believe they would not without a valid reason. It's simply not that easy to access my financial records. On the other hand if NTA wants info. an J-citizen with assets in the States well I'm sure under the new FATCA rules they should be able to get it.

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            • Originally posted by chainbolt View Post
              ...[*] Why are the dividends, interest, and capital gains I get abroad are taxed with the marginal tax rate, which is in my case 50% in Japan, while domestic interest and dividends are taxed with the flat tax rate of only 20%? A Japanese tax payer pays 20% "flat" on the dividends he gets in Japan, while I pay up to 50% on the dividends I get in my home country. How come????
              ...
              In another thread, I posted, and then posted a correction:


              Originally posted by johnnyG View Post
              This is WRONG (sorry), I was just at the tax office finishing off my own return with the help of the staff. There is a chart that they referred to, and the tax rate on dividends depends on the sum total of your adjusted income (the second box on your "gensen" slip)+dividends.

              If that total is up to 1,949,000 the tax is 5%
              ...up to 3,299,000 it's 10%
              ...up to 6,949,000 it's 20%
              ...up to 8,999,000 it's 23%
              ...up to 17,999,000 it's 33%
              ...and above 18m it's 40%
              This is from the chart I got at the NTA, and this is how my foreign dividends are taxed. I don't see how you'd be paying 50% on dividends, when this info indicates your max rate on dividends would be 40%, if your combined adjusted salary+dividends was over 18m.

              Comment


              • Originally posted by johnnyG View Post
                In another thread, I posted, and then posted a correction:




                This is from the chart I got at the NTA, and this is how my foreign dividends are taxed. I don't see how you'd be paying 50% on dividends, when this info indicates your max rate on dividends would be 40%, if your combined adjusted salary+dividends was over 18m.
                When you add in the 10% local taxes, it can be up to 50%.

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                • Okay, I guess chainbolt must be making over 18 million/year. I'm nowhere near that--my foreign dividends were taxed by the NTA at 20%. (And with the exclusion in the states, 0%)

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                  • Originally posted by Brown Cow View Post
                    Looking at it as evenhandedly as possible I can see that although we all agree that double taxation is wrong, we are not so strict on claiming double relief/allowances. It could be argued that if you insist on being taxed separately on J and Non J income then you are in fact benefiting from two sets of allowances and reliefs. That could be seen as unfair.
                    They are not double taxing. For taxes due on income abroad, they give you a full credit for the taxes you may have paid abroad. It's for all types of income. I have an apartment in my home country. Although I don't I have to pay any tax in my home country on interest and dividend (because I live more than 165 days abroad), I have for some strange reason to pay tax there for income from real estate. I have to declare this income here again, and the Japanese tax office reduces the tax due in Japan by the amount I have paid in my home country.

                    Comment


                    • Originally posted by johnnyG View Post
                      Okay, I guess chainbolt must be making over 18 million/year. I'm nowhere near that--my foreign dividends were taxed by the NTA at 20%. (And with the exclusion in the states, 0%)
                      Yes, do you feel my pain? And from next year onward the marginal tax rate goes up to 52% (national + local tax) for 30 years - to finance the reconstruction after 3/11. Every Yen above 18 MJPY is taxed then with 52% (in principle). They are bloodsucking, yet I do know it is better to comply.
                      Last edited by chainbolt; 2013-03-11, 08:47 PM.

                      Comment


                      • Originally posted by chainbolt View Post
                        They are not double taxing. For taxes due on income abroad, they give you a full credit for the taxes you may have paid abroad. It's for all types of income.
                        Yes, quite correct. I didn't mean to say that they did. I meant that we were (rightly) strongly against double taxation but don't feel the same way about taking advantage of two sets of reliefs and allowances.

                        Comment


                        • Originally posted by chainbolt View Post
                          Yes, do you feel my pain? And from next year onward the marginal tax rate goes up to 52% (national + local tax) for 30 years - to finance the reconstruction after 3/11. Every Yen above 18 MJPY is taxed then with 52% (in principle). They are bloodsucking, yet I do know it is better to comply.
                          Yep. I always feel enormous sympathy for people who tell me they have to pay enormous amounts of tax. My heart just bleeds every time. Poor things.

                          Comment


                          • Originally posted by chainbolt View Post
                            Yes, do you feel my pain? And from next year onward the marginal tax rate goes up to 52% (national + local tax) for 30 years - to finance the reconstruction after 3/11. Every Yen above 18 MJPY is taxed then with 52% (in principle). They are bloodsucking, yet I do know it is better to comply.
                            Not quite, if I read it correctly: The special reconstruction tax is levied on the tax payable, not the taxable base - a tax on the tax, essentially. So, if correct, that would make the top marginal rate 51.05% rather than 52.1% (also assuming residential tax is included in the calculation, not just national income tax).

                            That should make you feel better...

                            Comment


                            • Originally posted by iago View Post
                              Not quite, if I read it correctly: The special reconstruction tax is levied on the tax payable, not the taxable base - a tax on the tax, essentially. So, if correct, that would make the top marginal rate 51.05% rather than 52.1% (also assuming residential tax is included in the calculation, not just national income tax).

                              That should make you feel better...
                              Update (Would have just edited, if edit were still available ):

                              Looks like the 2.1% levy applies only to the National Tax (making the max marginal rate for national tax 40.84%). With respect to Inhabitants' Tax:

                              The amount of inhabitantsf tax is calculated on the basis of the income earned in the previous year. The tax rate is 10% of income, regardless of the amount of income. The standard amount of per capita tax levied in a year is \4,000, regardless of the amount of income.

                              However, during the years from 2014 to 2023, \1,000 will be added to the standard amount of per capita tax as a Special Reconstruction Tax.
                              http://www.nichizeiren.or.jp/eng/pdf...eTaxes2012.pdf

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                              • At a business seminar last week, I met a tax consultant from the Tokyo office of Earnst and Young. Naturally I use every opportunity to gather information. The guy confirmed that the NTA is definitely more focusing now on income abroad and that related "investigations" are increasing. He also mentioned that they are advising their clients to take the upcoming obligation (as of 1 January 2014) to declare assets above 50 MJPY abroad in their annual tax return (regardless they generate income or not) very serious.

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