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Be wary of your investments -- the TAXMAN is watching

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  • #61
    Originally posted by TJrandom View Post
    Because applying for the visa renewal every X years is tiring
    Because not knowing if it will be extended is worrying
    Because you want to stay longer
    Because you like living here
    Because you have family here
    Because your job and career are here
    Because other places you could live just plain suck
    more?
    Add
    Because you want to buy a house, why? real estate agents wont show you rental properties
    Because your children have started and want to end their education here
    Because the immigration laws might become more difficult, or tiered, which would categorize foreigners

    Comment


    • #62
      Originally posted by TJrandom View Post
      Because applying for the visa renewal every X years is tiring
      Because not knowing if it will be extended is worrying
      Because you want to stay longer
      Because you like living here
      Because you have family here
      Because your job and career are here
      Because other places you could live just plain suck
      more?
      Hijacking my own thread: if you are a P.R. then it is not so easy for your employer to summarily dump you.

      Comment


      • #63
        Originally posted by Morton View Post
        In my panic of the last month I think I read every page possible on the internet regarding tax, foreigners and Japan. One page I came across was a warning from KPMG that there has recently (last 2 years) been a surge in foreigners being targeted by the NTA.

        It seems that until a couple of years ago foreigners had basically been ignored by the NTA. Now that has all changed and the NTA have started a new section specifically to target invividuals with overseas income (ie generally us gaijin). These tax officials are specifically trained, have to pass special exams and are given a higher salary.

        One of the guys who audited me had a business card with ‘ÛÅ–±–劯. My wife did a bit of googling of this found out quite a bit of worrying information.

        As I said before I've been done, I'm clean and I will stay that way from now on.
        So then we move on -- to what? We can try to hide. Personally the only way I can think of would be to physically move money or instruments by travelling withing Europe. Go to offices in person and carry out transactions. Whether or not this is prudent, I do not know (probably not so smart), but to carry around large amounts of money does not seem like fun to me.

        Can/Should we trade here? Well, I suppose. This brings me back to my initial question: Which firm(s) here are good for trading otc Cdn. (other stocks)? Specifically, I want to trade something on the Toronto Venture Exchange, one more (CCO Cameco) after it pulls back, which is listed on the TSE and NYSE and, later, perhaps, go back to iShares EWY (Korea fund) which was very good to me.
        My better half uses one (Monex Beans) but I want to make sure we are separate.
        Last edited by Super Grover; 2010-12-16, 12:57 PM.

        Comment


        • #64
          Originally posted by TJrandom View Post
          Because applying for the visa renewal every X years is tiring
          Because not knowing if it will be extended is worrying
          Because you want to stay longer
          Because you like living here
          Because you have family here
          Because your job and career are here
          Because other places you could live just plain suck
          more?
          I am debating if i should get my PR or not, but I dont see why you cant do anything on this list except not having to renew your visa.

          I am planning on staying here for 10 or so more years. Ill have to renew my spousal visa 3 more times, but other than that I dont see how having PR or not will effect me.

          Comment


          • #65
            Having PR is just a lot less hassle (in a country that loves paperwork, precise documents, weird rules and the mighty hanko) but has little to do with tax obligations. As far as the NTA care if you've been here a day over 5 years (sometime less depending on your circumstance) you are deemed to be a resident and have to pay tax on all your worldwide income.

            Comment


            • #66
              Originally posted by Super Grover View Post
              So then we move on -- to what? We can try to hide. Personally the only way I can think of would be to physically move money or instruments by travelling withing Europe. Go to offices in person and carry out transactions. Whether or not this is prudent, I do not know (probably not so smart), but to carry around large amounts of money does not seem like fun to me.

              Can/Should we trade here? Well, I suppose. This brings me back to my initial question: Which firm(s) here are good for trading otc Cdn. (other stocks)? Specifically, I want to trade something on the Toronto Venture Exchange, one more (CCO Cameco) after it pulls back, which is listed on the TSE and NYSE and, later, perhaps, go back to iShares EWY (Korea fund) which was very good to me.
              My better half uses one (Monex Beans) but I want to make sure we are separate.
              I am pretty sure that you can trade stocks on other exchanges here if you open a brokerage account with one of the international players. Why don't you check out JPM?

              Good pick on Cameco. That is all I have to say.

              Comment


              • #67
                Tax investigation outcome

                Originally posted by O'Hanlon View Post
                Thanks for your comments and feedback.

                I will go with a translator, she has handled all the demands. The tax investigator told her many times. "we don't see any problem, we just want to make sure he is not laundering money, or is a millionaire hiding in Japan." This put me into a false state of complacency. After I submitted the last bank statement, the truth came out. Salary plus overseas funds has put you in a high tax bracket. We will explain the tax laws to you. You have broken the law and will have to pay penalty fees and back tax. Fortunately I was honest, but still this whole incident makes saving for retirement a difficult task, since they will double tax you in Japan. You could say I have been given a kick up the a#s. The information at their disposal is scary.
                Update Fri Dec17

                They went back 5 years and detailed salary, income tax and local tax
                They tracked income from interest and charged and additional 10% on top of the Aus govt 10% Non resident tax
                They applied 14% penalty for every year I had overseas (o/s) income and did not declare it
                They charged a late submission fee for all 5 years
                Last year we submitted a tax return for the first time,due to medical care involving surgery
                Since my o/s savings were not included in the tax return, I must pay back the total refund, plus they will tax me on o/s interest at 20% for that year. Total penalty, late fees and taxes to be paid within a month 1,250,000. Yes, I was shocked, but realized that I have no choice but to borrow or import the money and make this saga go away.

                If you don't submit a tax return form, they are lenient. If you submit a tax reurn and omit o/s income they will hammer you by demanding refund and an increased tax rate on o/s interest. Fortunately, I told the truth and provided all information requested, otherwise they could have been nasty. Now that I know the rules/tax law I have no excuse next year.

                They advised me, many people have been investing o/s. The law and investigation applied to both Japanese and foreigners. Short stay foreigners are ignored and are not audited. So there you have it. I have no suggestions to reduce taxes and have seen enough to know, they can and will, check and be less lenient/polite next time.
                Lesson learned: Once you are on the radar always tell the truth. If they can prove you were deliberately deceptive the penalty fee goes up to 40%. A court case is also possible.

                Comment


                • #68
                  Wow... that sucks to hear.

                  I'm trying to avoid all of this in advance, so i guess i better be straight from the get-go.

                  Question though; If they went back 5 years, had you already been in Japan for 5 years at that point? i.e. were you already a permanent resident for tax purposes?

                  Reason i ask is that, as a non-permanent resident you are only supposed to be liable to pay tax on your income from within Japan. But what happens if you get audited after say 6 years here? Do they go back 5 years and make you pay the tax on your foreign accounts from when you were a 'non-permanent resident'??

                  Comment


                  • #69
                    Originally posted by tokyo_dom View Post
                    Wow... that sucks to hear.

                    I'm trying to avoid all of this in advance, so i guess i better be straight from the get-go.

                    Question though; If they went back 5 years, had you already been in Japan for 5 years at that point? i.e. were you already a permanent resident for tax purposes?

                    Reason i ask is that, as a non-permanent resident you are only supposed to be liable to pay tax on your income from within Japan. But what happens if you get audited after say 6 years here? Do they go back 5 years and make you pay the tax on your foreign accounts from when you were a 'non-permanent resident'??
                    Yes, this is exactly what I want to know. I filed a return for the first time this year, and will be filing my second return this coming Spring. I am planning on staying in Japan and applying for permanent residency - so should I be claiming my overseas stuff now or not???

                    And since I didn't claim any interest money in the US last year, are they going to use this as an excuse to get some penalty fines out of me if I suddenly put that on my claim?

                    Comment


                    • #70
                      Originally posted by O'Hanlon View Post
                      Update Fri Dec17

                      They went back 5 years and detailed salary, income tax and local tax
                      They tracked income from interest and charged and additional 10% on top of the Aus govt 10% Non resident tax
                      They applied 14% penalty for every year I had overseas (o/s) income and did not declare it
                      They charged a late submission fee for all 5 years
                      Last year we submitted a tax return for the first time,due to medical care involving surgery
                      Since my o/s savings were not included in the tax return, I must pay back the total refund, plus they will tax me on o/s interest at 20% for that year. Total penalty, late fees and taxes to be paid within a month 1,250,000. Yes, I was shocked, but realized that I have no choice but to borrow or import the money and make this saga go away.

                      If you don't submit a tax return form, they are lenient. If you submit a tax reurn and omit o/s income they will hammer you by demanding refund and an increased tax rate on o/s interest. Fortunately, I told the truth and provided all information requested, otherwise they could have been nasty. Now that I know the rules/tax law I have no excuse next year.

                      They advised me, many people have been investing o/s. The law and investigation applied to both Japanese and foreigners. Short stay foreigners are ignored and are not audited. So there you have it. I have no suggestions to reduce taxes and have seen enough to know, they can and will, check and be less lenient/polite next time.
                      Lesson learned: Once you are on the radar always tell the truth. If they can prove you were deliberately deceptive the penalty fee goes up to 40%. A court case is also possible.
                      ____. I really think an decent accountant would have negotiated a better deal for you.

                      Can I just add that I kind of disagree that if you don't submit a tax return they are lenient. If you submit a return they are restricted to 3 years due to the statute of limitations. If you don't submit they will go back 5 years. There are also additional penalties for not submitting a return when you shoud have. In my case I had submitted returns but they were understated and simply amended. The fact that I had submitted returns seemed to help me.

                      My accountant advised me that proving that someone has been deliberately deceptive is actually quite difficult and would involve more than simply hiding money overseas. As for a court case, on paper yes it's possible, but in reality it's for the big fish. Even the NTA website details how many cases end up in court every year and it is tiny.

                      For what it's worth, although my accountant cost over 200,000 and I ended up paying the NTA more than you he still negotiated me a decent deal.

                      Comment


                      • #71
                        Originally posted by tokyo_dom View Post
                        Wow... that sucks to hear.

                        I'm trying to avoid all of this in advance, so i guess i better be straight from the get-go.

                        Question though; If they went back 5 years, had you already been in Japan for 5 years at that point? i.e. were you already a permanent resident for tax purposes?

                        Reason I ask is that, as a non-permanent resident you are only supposed to be liable to pay tax on your income from within Japan. But what happens if you get audited after say 6 years here? Do they go back 5 years and make you pay the tax on your foreign accounts from when you were a 'non-permanent resident'??
                        I have been a PN for 2 yrs. That didn't seem to come into the equation. All I know is they "punished" applied penalty fees for a 5 yr period. There definetly was a difference, because I submitted a tax return and did not include o/s income, that's why the total tax rebate amount has to be paid back and a higher penalty % was applied as well as no credit for the 10% tax paid overseas. The penalty and tax for that year was higher. I know, because I spent 2.5 hrs having it explained to me today.

                        Comment


                        • #72
                          Originally posted by Morton View Post
                          ____. I really think an decent accountant would have negotiated a better deal for you.

                          Can I just add that I kind of disagree that if you don't submit a tax return they are lenient. If you submit a return they are restricted to 3 years due to the statute of limitations. If you don't submit they will go back 5 years. There are also additional penalties for not submitting a return when you shoud have. In my case I had submitted returns but they were understated and simply amended. The fact that I had submitted returns seemed to help me.

                          My accountant advised me that proving that someone has been deliberately deceptive is actually quite difficult and would involve more than simply hiding money overseas. As for a court case, on paper yes it's possible, but in reality it's for the big fish. Even the NTA website details how many cases end up in court every year and it is tiny.

                          For what it's worth, although my accountant cost over 200,000 and I ended up paying the NTA more than you he still negotiated me a decent deal.
                          Morton
                          Today they showed me 3 tiers of how they penalize "offenders" one is late submission, the next tier is late and didn't understand and disclose total income (especially foreigner), the 3rd tier is someone who clearly undertands their tax responsibility/laws and deliberately deceives the NTA. In that case penalties are around 40%. He clearly stated, that I wasn't considered in this tier 3 "criminal" category. This investigator was polite and friendly, but let me know, I had broken the law
                          I can't comment on your experience, or expand on the taxation law, I can only comment on my own experience and the tax debt invoices that were given to me today.

                          Comment


                          • #73
                            One more point

                            Originally posted by O'Hanlon View Post
                            Morton
                            Today they showed me 3 tiers of how they penalize "offenders" one is late submission, the next tier is late and didn't understand and disclose total income (especially foreigner), the 3rd tier is someone who clearly undertands their tax responsibility/laws and deliberately deceives the NTA. In that case penalties are around 40%. He clearly stated, that I wasn't considered in this tier 3 "criminal" category. This investigator was polite and friendly, but let me know, I had broken the law
                            I can't comment on your experience, or expand on the taxation law, I can only comment on my own experience and the tax debt invoices that were given to me today.
                            As I was leaving the tax office, the investigator said just one more point you tax billis complete. We will forward all this corresponsence to the ward office advising that you higer eranings due to o/s funds. They will send you a separate tax bill. That kills overseas investment returns, which is what they are trying to stop.

                            Comment


                            • #74
                              Me, too. I'm also waiting for amended kenko hoken, juminzei, kindergarten fees and whatever else. Plus there will also be late payment fines with these also.

                              We did have differing experiences though. I told my tax guy, the international one, that now this is over I'm going to close my interest bearing account so as to avoid this in the future. I didn't want to do it until this was over so as not to look suspicious. He said that is my choice but that I should keep it open but that I just have to report my interest as it is simple for them to check. I'm still inclined to just close them to simplify things.

                              I'm the first of my foreign friends that this has happened to and I'm glad to be because everyone I've told seems to be as nervous as hell, and probably with good reason.

                              Comment


                              • #75
                                If you live in Japan for less than 5 years, you are classified as a non-permanent resident. Therefore, your oversea income is safe unless you bring it into Japan.

                                If you live in Japan for less than a year, you are classified as a non-resident. Usually, they wont even bother touching you since it is not worth it for such a small fish.

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