Need Advice Bank Transfer To Japan

[terebi_fanatic]

Hello

I've made a wire transfer and realized that I made a mistake in the address. It's been 5 days and the person in Japan still haven't received it.

I've read on another forum that if there is a mistake in the details your transfer may "get lost in the Japanese banking system"... is that really true?

I'm sending from a Canadian TD bank to Japan Post Bank

Desperate for answers, any help is appreciated, thank you

[wagyl]

I have had difficulties* transferring money to Japan Post Bank accounts from Australia. International transfer clearance is not for the whole nation, but by prefecture, and it all depends if the correspondent Japanese bank which your Canadian bank uses has an office in the prefecture that the Japan Post Bank account is linked to.

But first off, speak to your own bank about what to do about your error. My experience is that the issuing banks don't bother to get in contact with you when there is a problem, they wait for you to raise it.

* difficulties, by which I mean I have never actually succeeded, although I am assured it is theoretically possible when the planets align.

[Jack]

Your money will not get lost. Recovering it should not be a problem but you have to speak to the sending bank first and then someone has to hustle Japan Post to get their attention. With the time zones involved, expect a few weeks before you straighten this out.

[FG Lurker]

The money won't get lost, it will either arrive in the destination account or get returned. As you are aware that there is a likely problem you should go and raise it as an issue with your sending bank.

For receiving wires in Japan I suggest Citibank or Shinsei. Neither charges lifting fees and both process wires automatically. Every time I get a wire in my business MUFG account the fuckers call to confirm before making the deposit. Drives me fucking nuts!

[matsuki]

I send wires all the time without issue now but as has already been said, depending on the bank you're sending to, things get retarded. A few years ago I wired to one of my friends here with a Mizuho account...took 2 weeks and even then, they called and demanded my friend give them a detailed explanation about what the transfer was for. Keep in mind this is the country that people believe "is the most technologically advanced in the world" yet they still have most of the infrastructure on a paper-based system.

[wagyl]

Every time I get a wire in my business MUFG account the fuckers call to confirm before making the deposit. Drives me fucking nuts!

Not only that they charge 4000 yen, even if you have gone to the trouble to get the money denominated in JPY before transfer.

[FG Lurker]

Double post

[FG Lurker]

Not only that they charge 4000 yen, even if you have gone to the trouble to get the money denominated in JPY before transfer.

Nah, they don't charge me. You can get those sorts of fees waved if you negotiate when you're setting up a business account. Exchange rate spreads are negotiable too, depending on volume.

[matsuki]

Nah, they don't charge me. You can get those sorts of fees waved if you negotiate when you're setting up a business account. Exchange rate spreads are negotiable too, depending on volume.

Wow, that's more flexible than I thought...I charge most of my customers by credit card through a U.S. merchant account which goes to my U.S. business account. (From what I hear, J merchant accounts hold the funds for 60~90 days and take some sort of outrageous percentage out...I get the funds in 3 days and it avoids the additional time/cost of individual bank wires) I've always held to the rule that the less I deal with J-banking, the better. No taxes either

[Jack]

A few years ago I wired to one of my friends here with a Mizuho account...took 2 weeks and even then, they called and demanded my friend give them a detailed explanation about what the transfer was for.

This happened to me with HSBC as they would always ask the reason for any large money transfers (they said it was a Japan law). That fucking bank is so retarded that not only would they call me to confirm as Lurker said, they would also insist on speaking with my wife to confirm as well because it was a joint account we had.

That bank so annoyed me that I demanded to close the account and even that was a big production. The account is in the Akasaka branch and they would not accept a pdf copy of a signed letter sent by email. They would not accept a faxed letter. It had to be their own form signed and mailed in an envelope. Finally I drewdown the balance and left 400 yen in it and they are still calling me and the account is still not closed.

[FG Lurker]

Wow, that's more flexible than I thought...I charge most of my customers by credit card through a U.S. merchant account which goes to my U.S. business account. (From what I hear, J merchant accounts hold the funds for 60~90 days and take some sort of outrageous percentage out...I get the funds in 3 days and it avoids the additional time/cost of individual bank wires)

I do much the same thing. Sales & billing are done through my US subsidiary which makes payment processing a lot less expensive and a lot less frustrating.

I've always held to the rule that the less I deal with J-banking, the better. No taxes either

The Japanese tax office gets automatic notification of any wire (incoming and maybe outgoing too) that exceeds JPY 1 million. Banks must also notify them if it seems you are structuring your wires to receive (or send I guess) multiple wires under that limit. This law changed in 2009, the limit used to be 2mil yen and there were no rules about using multiple wires to stay under the limit. As someone who has received a letter from the tax office asking why I received so many bank wires I can say with certainty that the tax office does watch.

[FG Lurker]

they would not accept a pdf copy of a signed letter sent by email. They would not accept a faxed letter. It had to be their own form signed and mailed in an envelope. Finally I drewdown the balance and left 400 yen in it and they are still calling me and the account is still not closed.

This is a Japan thing. I'm not sure if it is a legal requirement or not but faxes and PDFs are not acceptable the way they are in many places. Only the original documents are acceptable. It's a PITA but it's not a Mizuho thing.

[matsuki]

I do much the same thing. Sales & billing are done through my US subsidiary which makes payment processing a lot less expensive and a lot less frustrating.

Indeed!

The Japanese tax office gets automatic notification of any wire (incoming and maybe outgoing too) that exceeds JPY 1 million. Banks must also notify them if it seems you are structuring your wires to receive (or send I guess) multiple wires under that limit. This law changed in 2009, the limit used to be 2mil yen and there were no rules about using multiple wires to stay under the limit. As someone who has received a letter from the tax office asking why I received so many bank wires I can say with certainty that the tax office does watch.

Good to know! Most of my suppliers and expenses are stateside though so the only incoming wires to Japan go to my personal account. Lately I have had a few customers pay me in cash here and used funds stateside so I can avoid a retarded rate and wire fee while I try to get my settlement funds to Japan. BTW, what did you end up telling the Tax office and what was their reaction? I don't see how they can do much to me when the funds go to a personal account but TIJ, and who knows what policies exist.

[FG Lurker]

BTW, what did you end up telling the Tax office and what was their reaction?

I hired an international tax adviser and we sat down together with a guy from the local tax office and a regional tax inspector who specializes in international business. They had a lot of questions, I thankfully had the answers and a lot of documentation. It was still quite a stressful time. It wasn't a massive amount of money involved (under 7 figures in US$) but they were still very interested. The tax office here (like tax offices everywhere) is looking for more ways to boost revenue and they are getting hungrier.

I don't see how they can do much to me when the funds go to a personal account but TIJ, and who knows what policies exist.

These wires were also to my personal account. I was running my business as a sole proprietor at that time, I finally incorporated last year. If you are getting a lot of wires (or any wires at all over 1mil yen) then it is quite likely that the tax office is getting notified of them.

[matsuki]

I've avoided all the large incoming wires by taking payment via the US merchant account so I doubt I have anything to worry about just yet BUT I'm really glad you posted as I can definitely find a way to work around the wires and just deposit cash into my account here.

[FG Lurker]

I've avoided all the large incoming wires by taking payment via the US merchant account so I doubt I have anything to worry about just yet BUT I'm really glad you posted as I can definitely find a way to work around the wires and just deposit cash into my account here.

My advice to you would be to pay the tax. If one of your Japan-based customers gets audited it could lead back to you. If you make too many large cash deposits to domestic bank accounts it could raise a flag (anti-yak laws). With all the deductions you can take here the tax load really isn't that bad, plus you get potential bonuses like business development loans once everything is squared away.

[matsuki]

My advice to you would be to pay the tax. If one of your Japan-based customers gets audited it could lead back to you. If you make too many large cash deposits to domestic bank accounts it could raise a flag (anti-yak laws). With all the deductions you can take here the tax load really isn't that bad, plus you get potential bonuses like business development loans once everything is squared away.

I'm not avoiding paying taxes, just setup to pay taxes to the U.S. instead of Japan. Tracing any orders back would lead to my US business, which is exporting product to the customers in Japan. The only tax not getting paid is the Japanese consumption tax, which needn't be paid to a U.S. based business. The money I would be depositing in my personal account here is just that, personal funds, not being used for business.

[FG Lurker]

I'm not avoiding paying taxes, just setup to pay taxes to the U.S. instead of Japan. Tracing any orders back would lead to my US business, which is exporting product to the customers in Japan. The only tax not getting paid is the Japanese consumption tax, which needn't be paid to a U.S. based business. The money I would be depositing in my personal account here is just that, personal funds, not being used for business.

Am@zon Japan is fighting the tax office over a similar set up at the moment. It's a huge court case that has been going on for a few years... (Am@zon does not pay income taxes in Japan, claiming that the business is online and the sales are taking place offshore.) I'm sure your business is set up somewhat differently to Am@zon but the point is that the tax office here doesn't give up once they decide to go after someone. "Transfer pricing", which determines the amount of profit that stays in one country vs another, is a huge issue for any company conducting business in more than one country. It's a big point of contention for many countries, including Japan.

* Sorry about the @ marks, for some reason FG stars out ******.

[terebi_fanatic]

thank you for the replies everyone. I will do just that then, tomorrow I will go to my branch, I already called them but need to show up in person. Their wire department will take a look at it.

The mistake was that I didn't put a province name, I put Hiroshima as the city...

They also asked for the reason, and I put "personal", hopefully it won't be a problem. I told the person receiving the money to say that it was money I owed her from back in Canada when she was teaching here

[matsuki]

Am@zon Japan is fighting the tax office over a similar set up at the moment. It's a huge court case that has been going on for a few years... (Am@zon does not pay income taxes in Japan, claiming that the business is online and the sales are taking place offshore.) I'm sure your business is set up somewhat differently to Am@zon but the point is that the tax office here doesn't give up once they decide to go after someone. "Transfer pricing", which determines the amount of profit that stays in one country vs another, is a huge issue for any company conducting business in more than one country. It's a big point of contention for many countries, including Japan.

* Sorry about the @ marks, for some reason FG stars out ******.

Very interesting indeed.

If that's their stance, I wonder why they registered a KK in Japan. Would seem like they could have avoided that and having an office over here if they outsourced their advertising/PR to a Japanese marketing company and customer support to yet another company.

[FG Lurker]

Very interesting indeed.

If that's their stance, I wonder why they registered a KK in Japan. Would seem like they could have avoided that and having an office over here if they outsourced their advertising/PR to a Japanese marketing company and customer support to yet another company.

I don't know all the ins and outs of the case in detail. I have a friend who works for a large accounting firm doing transfer pricing work and he mentioned the basics the other day.

I would assume Am@zon has a KK here for their fulfillment/logistics business and for working with domestic suppliers. Sales themselves however go through an offshore business (Am@zon International or something I think). Am@zon also has very few "company employees" here, almost everyone is a contractor or temp staff.

[matsuki]

I don't know all the ins and outs of the case in detail. I have a friend who works for a large accounting firm doing transfer pricing work and he mentioned the basics the other day.

I would assume Am@zon has a KK here for their fulfillment/logistics business and for working with domestic suppliers. Sales themselves however go through an offshore business (Am@zon International or something I think). Am@zon also has very few "company employees" here, almost everyone is a contractor or temp staff.

Hmm, if that's the case, it sounds like the KK could possibly be held liable for sales of domestic merchandise in Japan. I wonder if they are avoiding the consumption tax on those items though...I guess they technically can if the take possession as a foreign entity and resale them within Japan...but that's likely what is being contested. Still, not having a KK here would seem possible. It's not like Am0zon is a no name foreign company that domestic suppliers would refuse to work with.

[terebi_fanatic]

yep you guys were right, it just takes a veery long time for the money to get there and in addition to that she had to fill up a form that she's not sponsoring North-Korea and/or Iran with this huge amount of money (around 900$). I'm not joking about the letter btw

[FG Lurker]

I'm not avoiding paying taxes, just setup to pay taxes to the U.S. instead of Japan. Tracing any orders back would lead to my US business, which is exporting product to the customers in Japan. The only tax not getting paid is the Japanese consumption tax, which needn't be paid to a U.S. based business. The money I would be depositing in my personal account here is just that, personal funds, not being used for business.

I was talking to my friend who does transfer pricing work at an accounting firm tonight. We weren't discussing your situation in particular but we were talking about transfer pricing in general. I didn't realize how strict the Japanese tax office is getting about this and how many different types of things transfer pricing covers. Your current situation falls under transfer pricing it would seem.

Basically Japan (and other countries) want tax from profits generated by work in their countries. If Japan audits you then they will want you to pay tax on all profits generated by work done in Japan, no matter where your company may be registered. This has become much stricter in the past few years, it's an area the tax office is really focusing on.

The chance of an audit is probably reasonably small but the repercussions of it would be pretty substantial.

[Screwed-down Hairdo]

Basically Japan (and other countries) want tax from profits generated by work in their countries. If Japan audits you then they will want you to pay tax on all profits generated by work done in Japan, no matter where your company may be registered. This has become much stricter in the past few years, it's an area the tax office is really focusing on.

Great post! I suspect Japan may continue to become even stricter on overseas transfers in the coming years. It needs to pay for its aging society (pension, health, funeral costs for jiichan/baachan who don't look where they're going when theyre on their chari, etc.) and public debt and the only way it can really effectively do so is to go after funds generated by the mass of industry it allowed to move overseas in the past couple of decades.
A by-product of this is going to be more stringent policing of transfers of funds into Japan, and probably, increased taxes levied on them.
But take this with a grain of salt....I know fuck-all about money.

[FG Lurker]

Great post! I suspect Japan may continue to become even stricter on overseas transfers in the coming years. It needs to pay for its aging society (pension, health, funeral costs for jiichan/baachan who don't look where they're going when theyre on their chari, etc.) and public debt and the only way it can really effectively do so is to go after funds generated by the mass of industry it allowed to move overseas in the past couple of decades.
A by-product of this is going to be more stringent policing of transfers of funds into Japan, and probably, increased taxes levied on them.
But take this with a grain of salt....I know fuck-all about money.

It's not so much taxes on money coming and going, it's more that money coming and going is one of the flags that the tax office is watching for.

The issue is that the tax office wants taxes paid on money earned from work in Japan. It doesn't matter where the company is or where the money is being paid to, if the work is done here the tax office wants their cut.

[matsuki]

Your current situation falls under transfer pricing it would seem.

Well, in my case it's pretty much all of it is handled online (could be handled from anywhere with an internet connection) and the actual product is shipped from the US to Japan just as the payments go from Japan to the US business....so they'd have a hell of a time making any case...and even if they did, how would they go after anything? Sue a U.S. company in the U.S. for paying taxes in the U.S. instead of Japan?

[FG Lurker]

[matsuki]

[FG Lurker]

I'm not sure the specifics of the law here but it would be pretty surprising to learn if they can hold some personally accountable for taxes they feel they are owed by a business. (a foreign one at that)

If that someone represents the overseas business in Japan they are the agent of that business. Japan (and every other country) wants their share of taxes for work done in their country. That's the bottom line as far as I understand it.

Yeah, if they go after anyone, it's not gonna be pretty. Business doesn't require me to be in Japan at all but being blacklist from Japan would indeed suck. Makes me even more interested in what happens with ******. This type of cracking down can also start a taxing war with other countries who have Japanese agents within their borders, selling direct and importing from Japan.

This happens already. The IRS for example is also quite focused on transfer pricing. Especially in these tight times everyone wants as much of the tax pie as they can get.