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Be wary of your investments -- the TAXMAN is watching

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  • #76
    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'??
    Not 5. But it is not always the case that it is 5 written in stone. It can be 3.

    Comment


    • #77
      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.
      But if one had accounts offshore, I think it could be fairly assumed that the person was wanting to escape taxation.

      Comment


      • #78
        I think a couple of you tried to answer the question, but I have to admit I still don't get it.

        If I'm planning on being a permanent resident, then I should be claiming all over-seas income now, even though I'm not a PR yet?

        Or do I just need to start claiming that income once I get PR?

        Comment


        • #79
          Originally posted by Super Grover View Post
          This is written to caution some who may not be aware that the folks in the tax agency have become very vigilant in tracking money being sent out of Japan. This is not hearsay. I have actual incidents recounted to me in the past few months. Foreign teachers seem to be being targeted.
          But what triggered such audits?

          Or are you suggesting they were randomly choosen?



          Originally posted by Super Grover View Post
          .... Foreign teachers seem to be being targeted.

          Somewhat large amounts sent will trigger a report to the agency. Frequent transfers will also trigger a report.
          What do the Japanese consider large amounts?

          Anything over 1 million yen?

          Frequency? More than once a month?
          Last edited by Ken44; 2010-12-18, 10:33 AM.

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          • #80
            Originally posted by Teacher101 View Post
            I think a couple of you tried to answer the question, but I have to admit I still don't get it.

            If I'm planning on being a permanent resident, then I should be claiming all over-seas income now, even though I'm not a PR yet?

            Or do I just need to start claiming that income once I get PR?
            Consult with a qualified professional! No why claim when it is not -- in most cases -- required until 5 years+a day. No doubt based on the info provided, you will be taking steps to prevent a nasty audit.

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            • #81
              Originally posted by Ken44 View Post
              But what triggered such audits?

              Or are you suggesting they were randomly choosen?





              What do the Japanese consider large amounts?

              Anything over 1 million yen?

              Frequency? More than once a month?
              Also consider, if you have a business whether small or large and you buy product from overseas on a regular basis-expect to see the taxmen on a regular basis. Also expect your bank to constantly question why you are sending/receiving funds from overseas and for them to report/freeze your accounts if you deal with certain countries. Personal experience in regards to funds for a regular live fish shipment from Cambodia and a plant shipment from S Africa.

              Japanese friend had a similar problem shipping in raw gemstones from Myanmar.

              Comment


              • #82
                Originally posted by Ken44 View Post
                But what triggered such audits?

                Or are you suggesting they were randomly choosen?





                What do the Japanese consider large amounts?

                Anything over 1 million yen?

                Frequency? More than once a month?

                As I wrote above, NOT random. I suspect they have a plan to collect taxes from the foreign community. Again, I suspect they will categorize us. Foreign profs will generally be making at least 6 million. People in int'l business with well known firms would likely be making close to the 33% bracket or be in it. Then I think they will look at bank transfers.

                E.g., how did they know that a guy I know (well) had accounts in his country with a substantial amount invested? How did they find his specific accounts? Did they ask for one Japanese bank's total transfers abroad over 500,000 and then isolate him already having him as a likely candidate? That would be my guess. He said many transfers were under a million, but a few over a million over 5 years. He made around 5 transfers a year (+/-). He took funds back, too, in cash. He was stunned to find out that they knew exactly where ALL of his money was. Not just one place but everyhere. They didn't know the amounts he had, though. This means the authorities in that country cooperated with the NTA. So I am guessing (with some evidence) that over 500,000 4-5 times a year will trigger an audit. But I suspect that they start by looking for likely "targets" and then proceed from there. Based on that, I may be next.

                I have checked with one bank in Canada, and they wrote that they will not provide actual data without a court order. I asked my investment firm if they have been contacted by the NTA. No reply yet. I do not see how they would know unless they specifically contact the Canadian version of the NTA to have them supply my tax info. I have money elsewhere. I am wondering what to do. From my posts above, people can see that I am thinking about trading here. I will try to find out about whether the low tax rate expiring at the end of 2011 applies only to stocks listed here (i.e., crappy Jpnse stocks) or whether it applies to trades made in Japan of certain categories of stocks -- a very important distinction.
                Last edited by Super Grover; 2010-12-18, 11:18 AM. Reason: precision

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                • #83
                  Originally posted by Super Grover View Post
                  I have checked with one bank in Canada, and they wrote that they will not provide actual data without a court order. I asked my investment firm if they have been contacted by the NTA. No reply yet. I do not see how they would know unless they specifically contact the Canadian version of the NTA to have them supply my tax info. I have money elsewhere.
                  I believe they got my information from my government not from the bank itself. They knew about my accounts existance but the only precise detail they knew was the amount of interest I received. Again they also knew about my stock situation and whether or not I owned any property. Luckily I own no stock or property but it was checked.

                  Comment


                  • #84
                    I think it will be the latter case. Stocks in Japan aren't trading well. BTW what is the nationalities of the people who have been zapped for having funds overseas? Which banks, in what countries are involved. It might be nice to start a blacklist and circulate it in the expat community.

                    Also it might be wise to look at how the Japanese authorities look at view RSP's and other taxshelters as they are structured in Canada. I believe they expect to tax the interest earned by these plans on a yearly basis despite the government's plan to defer interest until the funds are actually withdrawn.

                    Comment


                    • #85
                      Originally posted by Super Grover View Post
                      But if one had accounts offshore, I think it could be fairly assumed that the person was wanting to escape taxation.
                      I assumed so, too but my accountant told me the reality and the burden of proof is much higher. There is a big difference between tax avoidance and tax evasion. The accountant used a Japanese adjective to describe what is considered tax evation (I can't recall it at present).

                      Comment


                      • #86
                        Originally posted by Teacher101 View Post
                        I think a couple of you tried to answer the question, but I have to admit I still don't get it.

                        If I'm planning on being a permanent resident, then I should be claiming all over-seas income now, even though I'm not a PR yet?

                        Or do I just need to start claiming that income once I get PR?
                        The law on PR got tighter in 2008. Prior to applying, I was told that the benefit was visa renewal every year is eliminated, re-entry permit laws remain unchanged, but disclosure of total assets is required for PR. This is just what I recall being told March 2008. The laws may have changed, so better to check with your local immigration. office.

                        Comment


                        • #87
                          Going solely by the above, what would be the implications of keeping retirement savings here in Japan, with minimal amounts (say couple million yen) overseas, and then (a) taking as much yen as allowed in person overseas, and (b) transferring the bulk in the final year?

                          For argument's sake - 20 million yen.

                          Obviously risking possibly unfavorable exchange rates at the time and high commission to exchange, but how would this weigh against the tax hassles above?

                          Comment


                          • #88
                            Originally posted by Morton View Post
                            I believe they got my information from my government not from the bank itself. They knew about my accounts existance but the only precise detail they knew was the amount of interest I received. Again they also knew about my stock situation and whether or not I owned any property. Luckily I own no stock or property but it was checked.
                            You're an American citizen then? The IRS is, I'm told, on good terms with the NTA. So, there was without doubt full cooperation and full disclosure on the US Government's side.

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                            • #89
                              So far it seems there is an Australian and a Canadian who have wrote on this thread about being caught. I am neither, neither am I an American.

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                              • #90
                                Originally posted by Morton View Post
                                So far it seems there is an Australian and a Canadian who have wrote on this thread about being caught. I am neither, neither am I an American.

                                Me neither. Here's hopin' the UK authorities tell J tax snooping agencies to f&ck off...

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