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Be wary of your investments -- the TAXMAN is watching

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  • Originally posted by chainbolt View Post
    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.
    Due to the yen being so willfully and rapidly devalued, 50 MJPY will be nothing soon! Basically what the NTA is doing is attempting to force every person to declare where are keeping every penny.

    Comment


    • For Americans who are subject to FBAR filing requirements, the link below is pretty relevant to the title of this thread.

      "Taxpayers with undisclosed foreign accounts wish it were not true, but the reality is that the U.S. government, after a long period of inactivity and ineffectiveness, has taken significant steps over the past few years to identify and punish failures to file Forms TD F 90-22.1 (Report of Foreign Bank and Financial Accounts), or foreign bank account reports (“FBARs”) as they are commonly known."

      http://taxblawg.net/2013/04/25/fbar-...-case-mcbride/

      Comment


      • I hate reading this thread before bedtime.
        Fred

        Comment


        • Update + query

          An Update
          I received a communication recently. Briefly, it went like this. "Subject to Clause A-123 of Agreement ABC, we are invoking our right to close your account by _____, 2013. Please contact us immediately to arrange the necessary procedures."
          Yikes! What??? It turns out that Japan's regulatory authorities have been talking with other reg. auths. in certain countries to clamp down on who knows what. So the institution where I have some stocks and cash was instructed by its semi-regulatory govt. (Canada) that it must open a branch in Japan otherwise it must end all trading for people living in Japan. That institution decided it was not worth it (for a number of reasons) to set up a branch in Japan. Thus, all of us in Japan using that institution have received an account closure notice.
          What we can reasonably conclude from this, I believe, is that the Japanese tax authorities are proactively getting other governments to force their banks to open a branch here, where, presumably they'd have to cooperate with information requests from the NTA. It seems the FSA in conjunction with the NTA are demanding that foreign governments force offshore entities that have national affililiation with a major cooperating country (e.g., the head office is a Cdn Bank A with offshore facilities in Jersey, USA Bank B has a head office in the USA but with offshore in Luxembourg, etc.) to disclose its clients who are Japanese or who are residing in Japan. My institution, rather than providing disclosure, terminated business with its clients from Japan -- all of us. So be aware if need be.

          Query
          Where can Canadians safely invest offshore? Is it even possible? I need to transfer shares and cash to a new broker by an approaching deadline. Singapore was suggested. HK, too. Monex Boom in HK and Singapore was one name. (I know Monex is Japanese -- formerly Monex Beans). Can't bring stocks here, as far as I know, because the stocks are of a Canadian company. How could I trade them?

          Relevant thoughts?
          Last edited by Super Grover; 2013-05-23, 10:17 PM. Reason: clarity

          Comment


          • I have just got a very similar letter from a bank in Europe giving me to the end of the month. It is a real stinker of a situation. So, it appears that unless we deal with a Japanese company or a branch of a company in Japan we can't have an account. I have no idea where I am going to try now.

            Can Monex operate in English? Do I have to deal in Yen? Is there enough time to get an account open before the deadline?

            Grrrrrrrrrr.

            Comment


            • PM is ok if you like. Look up Monex Boom. BUT, I do NOT know yet whether this is a reputable firm.
              Last edited by Super Grover; 2013-05-23, 10:29 PM.

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              • It actually doesn't make any sense for the Japanese government to tax on investment income abroad which is not brought to Japan.

                Comment


                • Originally posted by Super Grover View Post
                  PM is ok if you like. Look up Monex Boom. BUT, I do NOT know yet whether this is a reputable firm.
                  Yep. Will do. I looked up Monex Boom and see what you mean. It looks OK, but it needs more research and time is pressing.

                  Comment


                  • Have either of you considered the globally lauded direct wealth transfer system, Kurogane Direct?

                    They say it is a pungent fund.

                    Transfers are easy and discreet, not to mention final.


                    Jokes aside, a big ole Ouch! to you both

                    Comment


                    • Originally posted by Super Grover View Post
                      An Update
                      I received a communication recently. Briefly, it went like this. "Subject to Clause A-123 of Agreement ABC, we are invoking our right to close your account by _____, 2013. Please contact us immediately to arrange the necessary procedures."
                      Yikes! What??? It turns out that Japan's regulatory authorities have been talking with other reg. auths. in certain countries to clamp down on who knows what. So the institution where I have some stocks and cash was instructed by its semi-regulatory govt. (Canada) that it must open a branch in Japan otherwise it must end all trading for people living in Japan. That institution decided it was not worth it (for a number of reasons) to set up a branch in Japan. Thus, all of us in Japan using that institution have received an account closure notice.

                      Relevant thoughts?
                      Name the financial institution please.

                      Comment


                      • It turns out that Japan's regulatory authorities have been talking with other reg. auths. in certain countries to clamp down on who knows what.
                        Others have noted similar issues with opening bank accounts overseas as well. ("In principle" Japanese residents can't open accounts with one Singapore bank I investigated, but after contacting them I found it was possible if you can visit in person).

                        I think this is part of the push to make it easier for the NTA to stamp out offshore tax evasion (even if through preventing people from earning income from offshore in the first place), although ostensibly "it's for investors' protection".

                        The Japanese FSA has an idea that any financial service provider in the world that provides services to someone who resides in Japan is "in principle" breaking the law if they aren't registered with the FSA under the Financial Instruments law (rather than just telling investors they are on their own if they wish to engage in such dealings than with fee-heavy, tax compliant Japanese operators, as would be a rational approach when dealing with mature adults, not tax cows).

                        But fortunately, the FSA has been kind enough to provide a list of such "unregistered" financial services providers for our reference!

                        And here it is:
                        http://www.fsa.go.jp/ordinary/chuui/mutouroku/03.pdf

                        I presume these offshore financial services providers were contacted but essentially told the FSA that they don't intend to comply with Japan's domestic laws. Just glancing through, most of these "unregistered" operators appear to be forex outlets, so it's interesting to hear you're getting this from a brokerage...

                        This "unregistered" operators list is from this page here, for all ye Japanese readers who might be interested.
                        http://www.fsa.go.jp/ordinary/chuui/mutouroku.html

                        The authorities are silly. Stamping out tax evasion by seeking to make it impossible for people to earn income offshore in the first place is crazy. But the Japanese government is virtually bankrupt, so desperate behaviour such as this comes as no surprise.
                        Last edited by fxgai; 2013-05-24, 10:44 AM.

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                        • I've never traded stocks but even I have heard of Boom. Some Japanese books I have seen about offshore investing have mentioned them.
                          But I wonder how long until the JFSA gets them to kneel down to Japanese law.

                          http://www.talkgold.com/forum/forumdisplay.php?f=22 is a forum dealing with offshore investing, might be good for searching for some leads.

                          Comment


                          • Originally posted by sillybilly View Post
                            It actually doesn't make any sense for the Japanese government to tax on investment income abroad which is not brought to Japan.
                            Quite. If the rest of my family were up for it I'd be quite keen to establish residency outside this trap.

                            Comment


                            • Is anyone trading Canadian stocks (listed on the TSE, where "T" = Toronto) from here (Japan) and paying reasonable fees? I am not adverse to trading from Japan SO LONG AS I am not going to be fleeced as regards various fees.

                              Comment


                              • Originally posted by fxgai View Post
                                The Japanese FSA has an idea that any financial service provider in the world that provides services to someone who resides in Japan is "in principle" breaking the law if they aren't registered with the FSA under the Financial Instruments law (rather than just telling investors they are on their own if they wish to engage in such dealings than with fee-heavy, tax compliant Japanese operators, as would be a rational approach when dealing with mature adults, not tax cows).
                                Interesting. Where can I read more about this?

                                Comment

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