Death & Taxes

[Samurai_Jerk]

They're coming for you ...

Japan to track down foreign accounts

Japan will gather information on residents' overseas financial holdings in an effort to keep tabs on wealthy people who exploit tax loopholes on an international scale.

The National Tax Agency will work with counterparts around the world, including, significantly, authorities in tax havens.

Some 16.3 billion yen ($138 million) in inherited overseas assets went unreported in Japan in the 2013 tax year, a more than sixfold increase from the previous year. The agency sees this as a serious problem. Starting in 2014, people with more than 50 million yen in overseas assets are required to report them for tax purposes.

[Taro Toporific]

They're coming for you ...
Japan to track down foreign accounts

"...Starting in 2014, people with more than 50 million yen in overseas assets are required to report them for tax purposes...(Nikei.com) "

Saaa, we should all have such problems*.

*It would be a big bummer to inherit my family's modest ranch
in Colorado and then have to pay 50-70% Japanese inheritance
tax on it on top of US taxes.

[Coligny]

Foreign accounts of fureigners or localz ?

Might have to finally declare my brothels in Romania...

Wonder if maf father is dead... No answer for new years card and way too much people interested back home in fucking me over the inheritance... Should get me a notary... But all those that I know are already in jail...

[wagyl]

Foreign accounts of fureigners or localz ?

Everyone tax-resident in Japan. And not just accounts, it includes all assets.

[IparryU]

yup, and if you so happen to die here, anything that your family gets from overseas will be reviewed as well. It is up to you... to make sure that your will/estate is reported to the Japanese sided, as well as translated and certified etc. etc. etc.

I have a presentation that I can post that goes over the general tax stuff for this year. I got all the good stuff bookmarked too from all the major accounting firms.

[wagyl]

yup, and if you so happen to die here, anything that your family gets from overseas will be reviewed as well. It is up to you... to make sure that your will/estate is reported to the Japanese sided, as well as translated and certified etc. etc. etc.

I have a presentation that I can post that goes over the general tax stuff for this year. I got all the good stuff bookmarked too from all the major accounting firms.

Umm, I don't think it is limited to people who die here. Wherever someone dies, if someone tax-resident in Japan receives an inheritance, the tax applies.

The remaining pedant in me says that it is pretty hard to get your will reported if you are dead....

[Russell]

Dunno what the inheritance tax is in Japan, but I have the impression that it is lower than in the Netherlands.

And I suppose the principle of no double taxation applies, so I would probably be *happy* to pay inheritance tax in Japan. Maybe...

[matsuki]

Foreign accounts of fureigners or localz ?

Everyone tax-resident in Japan. And not just accounts, it includes all assets.

I always wonder how that works. If, say, a Canadian named Jack Mehoff has property or a few bank accounts back in good ol BC. How zeee fuck does the J-gov even get access to that info. If he was J-citizen, I understand them forking over records...but how does your own country justify ratting you out to a foreign country like Japan just because they claim him as a "tax-resident"...despite denying him permanent residency or guaranteed rights because he's not a "citizen." (assuming Mr. Mehoff is paying property and any relevant taxes in Canada) To add to that, remember that Japan considers enclosed garages, closets, and space in walls when determining property taxes...so are they going to attempt to apply their assessments to foreign properties?

BTW: The 34 OECD member countries are: Australia, Austria, Belgium, Canada, Chile, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Iceland, Ireland, Israel, Italy, Japan, Korea, Luxembourg, Mexico, the Netherlands, New Zealand, Norway, Poland, Portugal, Slovak Republic, Slovenia, Spain, Sweden, Switzerland, Turkey, the United Kingdom, and the United States.

[wagyl]

And I suppose the principle of no double taxation applies

3. The existing taxes to which this Convention shall apply are:
a) in the case of Japan:
(i) the income tax (Shotokuzei);
(ii) the corporation tax (Hojinzei); and
(iii) the local inhabitant taxes (Juminzei)
(hereinafter referred to as "Japanese tax"); and
b) in the case of the Netherlands:
(i) the income tax (de inkomstenbelasting);
(ii) the wages tax (de loonbelasting);
(iii) the company tax (de vennootschapsbelasting), including the
Government share in the net profits of the exploitation of natural
resources levied pursuant to the Mining Act (Mijnbouwwet); and
(iv) the dividend tax (de dividendbelasting)
(hereinafter referred to as "Netherlands tax").

tl/dr: They'll have their bit, and we'll have our bit too, thank you very much. You think there is any principle against double taxation??? That is just us sometimes giving favours.

[wagyl]

Foreign accounts of fureigners or localz ?

Everyone tax-resident in Japan. And not just accounts, it includes all assets.

I always wonder how that works. If, say, a Canadian named Jack Mehoff has property or a few bank accounts back in good ol BC. How zeee fuck does the J-gov even get access to that info.

Which is why they are making us report it. Among that list of OECD countries are a number of tax regimes which do not have inheritance taxes and which do not have records of changes in assets, so Japan is compiling its own lists.

I also happened to open a new bank account in a foreign country in December. In addition to the questions about US citizenship, which I expected, there was an item to list out all the countries you have an obligation to pay tax to, and asking for tax file numbers in each of those countries. There is a strong cooperative spirit between tax agencies recently.

[Wage Slave]

Dunno what the inheritance tax is in Japan, but I have the impression that it is lower than in the Netherlands.

And I suppose the principle of no double taxation applies, so I would probably be *happy* to pay inheritance tax in Japan. Maybe...

The problem is that the principle of no double taxation works in a particular way. They calculate how much tax you should pay here in Japan. Then they look to see how much you have paid in A. N. Other country. You then get a credit for that against your tax bill here. If what you owe here is lower or equal to what you have actually paid at home then fine - end of story.

However, if you have managed your affairs at home to reduce your bill to (say) zero in the case of inheritance tax (doable) then tough titty - along comes the NTA to have a second bite at the cherry.

I never thought I would say these words but - I feel a distinct need to set up a discretionary trust fund. Must have a chat with the solicitor.

[Russell]

Hmm, now that permanent resident tax payers are excluded from receiving welfare if the shit hits their fan, there is kind of less incentive to pay inheritance tax in Japan, especially if there is no tax treaty preventing double taxation, isn't it?

[wagyl]

I never thought I would say these words but - I feel a distinct need to set up a discretionary trust fund. Must have a chat with the solicitor.

I sometimes think that trust structures and the like serve only to postpone the issues so that they have to be eventually cleared up by the next generation, and provide a steady income stream for your accountant.

Maybe the best thing you can do to preserve your tax position is to encourage your ancestors to spend all their money while they are living (and not buy anything with lasting value with it), and for you to spend yours as well, for the sake of your heirs.

Hmm, now that permanent resident tax payers are excluded from receiving welfare if the shit hits their fan, there is kind of less incentive to pay inheritance tax in Japan, especially if there is no tax treaty preventing double taxation, isn't it?

Russell, as I understand it, local governments are still paying benefits, it is just not guaranteed that they will. Are there reports of local governments stopping payments they had previously been making?

[matsuki]

The problem is that the principle of no double taxation works in a particular way. They calculate how much tax you should pay here in Japan. Then they look to see how much you have paid in A. N. Other country. You then get a credit for that against your tax bill here. If what you owe here is lower or equal to what you have actually paid at home then fine - end of story.

However, if you have managed your affairs at home to reduce your bill to (say) zero in the case of inheritance tax (doable) then tough titty - along comes the NTA to have a second bite at the cherry.

Which sounds crazy to me if your tax obligation in your home country is determined to be zero and Japan swoops in with it's own determination of taxation on your foreign assets in that home country. I wonder if it works both ways...say you lose a ton of money overseas but your earnings in Japan are in the black....does that then relieve you of some of your taxation in Japan since you'd be in the red over all?

[wagyl]

I don't know if you think there is anything special about "home country" or you just don't feel like calling this place home, but as far as the tax authorities are concerned there are plenty of ways you can be regarded as a tax resident in multiple countries: each has set their own rules and you could potentially meet a multiple of criteria.

In the case of Japan, if Japan regards you as tax resident, they want to tax on your income worldwide, and naturally if you have foreign losses that impacts on your worldwide income.

I am not a Tax Accountant, by any means........


By the way, you appear to be approaching this whole taxation issue with common sense. That road leads to tears. It is not common sense, it is "whatever rules we make and manage to get away with." Forget that at your peril.

[matsuki]

Home country as in you are a citizen of...meaning some of the info Japan is seeking here isn't legally given out without it being specifically sought after and with appropriate warrants and authority.

I hardly make enough outside Japan for this to affect me so I'm just throwing common sense against the wall here...but yeah, not exactly as logical as one would hope.

[Wage Slave]

The problem is that the principle of no double taxation works in a particular way. They calculate how much tax you should pay here in Japan. Then they look to see how much you have paid in A. N. Other country. You then get a credit for that against your tax bill here. If what you owe here is lower or equal to what you have actually paid at home then fine - end of story.

However, if you have managed your affairs at home to reduce your bill to (say) zero in the case of inheritance tax (doable) then tough titty - along comes the NTA to have a second bite at the cherry.

Which sounds crazy to me if your tax obligation in your home country is determined to be zero and Japan swoops in with it's own determination of taxation on your foreign assets in that home country. I wonder if it works both ways...say you lose a ton of money overseas but your earnings in Japan are in the black....does that then relieve you of some of your taxation in Japan since you'd be in the red over all?

No, is the short answer to that I believe. You just have zero foreign income to report.

However the situation regarding inheritance tax is not that bad I see - Although they have (as of Jan 1st this year) made it a whole lot worse. The basic deduction has fallen from 50 million to 30 million and the allowance per heir from 10 to 6 million.

So, someone with 3 siblings would have a zero rate allowance of 48 million even under the new rules. And then they would pay 15% on the next 30 million. I don't think I need a trust fund after all.

http://www.japantimes.co.jp/community/2014/10/03/how-tos/inheritance-tax-in-japan-may-not-be-the-burden-you-imagined/#.VL0QjNKUfE1

[legion]

By the way, you appear to be approaching this whole taxation issue with common sense. That road leads to tears. It is not common sense, it is "whatever rules we make and manage to get away with." Forget that at your peril.

Very true, I remember a former CFO of my company telling me a similar thing.

[IparryU]

yup, and if you so happen to die here, anything that your family gets from overseas will be reviewed as well. It is up to you... to make sure that your will/estate is reported to the Japanese sided, as well as translated and certified etc. etc. etc.

I have a presentation that I can post that goes over the general tax stuff for this year. I got all the good stuff bookmarked too from all the major accounting firms.

Umm, I don't think it is limited to people who die here. Wherever someone dies, if someone tax-resident in Japan receives an inheritance, the tax applies.

The remaining pedant in me says that it is pretty hard to get your will reported if you are dead....

no shit sherock, really hard to get stuff done if your dead

probate follows you based on your home country and where you claim your residence (and your place of death in rare cases). it is your also responsibility to report your will to both your home country and your resident country. So, if you kick the can with all your shit back in your home country, then you have to make sure that Japan knows this so your wife doesn't have to fuck around with the tax authorities, lawyers, in-laws, etc.

Main point of this is because if your home country takes their cut of the estate then sends the money to your wife, the tax authorities here are going to flag it and want to run through it with a fine comb cause they have to determine what tax is for them. This could take a long time depending on your wife's ability to speak with the IRS/HMRC/CRA/etc. (yes, her responsibility now) and then get that relayed to the Japanese tax authorities. So this means money gets locked up and the widow is in a deeper emotional and financial hole than before.

So if you have a will... you should report it to both your home country and resident country, else you are just complicating everything for your beneficiaries.

[wagyl]

Home country as in you are a citizen of...meaning some of the info Japan is seeking here isn't legally given out without it being specifically sought after and with appropriate warrants and authority.

I hardly make enough outside Japan for this to affect me so I'm just throwing common sense against the wall here...but yeah, not exactly as logical as one would hope.

You seem to be confusing nationality with whether the tax authority regards you as a resident. The tax authority is very modern and inclusive: they take money form anyone, no matter what their colour or creed. It shouldn't need to be said, but just to confirm: your residence for tax purposes has no relation whatsoever to your immigration status.

The tax authority has been given the authority by the Diet to ask you about your foreign assets. That is appropriate authority.


There are countries where you can be a citizen but not resident for tax purposes. I know that the US doesn't seem to do that, so that concept may seem foreign to you.

[IparryU]

The problem is that the principle of no double taxation works in a particular way. They calculate how much tax you should pay here in Japan. Then they look to see how much you have paid in A. N. Other country. You then get a credit for that against your tax bill here. If what you owe here is lower or equal to what you have actually paid at home then fine - end of story.

However, if you have managed your affairs at home to reduce your bill to (say) zero in the case of inheritance tax (doable) then tough titty - along comes the NTA to have a second bite at the cherry.

Which sounds crazy to me if your tax obligation in your home country is determined to be zero and Japan swoops in with it's own determination of taxation on your foreign assets in that home country. I wonder if it works both ways...say you lose a ton of money overseas but your earnings in Japan are in the black....does that then relieve you of some of your taxation in Japan since you'd be in the red over all?

tax in home country - tax in resident country = the amount that still has to be paid

so assuming that the percentages are based on the same amounts...

if home country tax (and estate is here) is 0% and resident country tax is 1%, you still have to pay resident country the difference.

Home country as in you are a citizen of...meaning some of the info Japan is seeking here isn't legally given out without it being specifically sought after and with appropriate warrants and authority.

I hardly make enough outside Japan for this to affect me so I'm just throwing common sense against the wall here...but yeah, not exactly as logical as one would hope.

You seem to be confusing nationality with whether the tax authority regards you as a resident. The tax authority is very modern and inclusive: they take money form anyone, no matter what their colour or creed. It shouldn't need to be said, but just to confirm: your residence for tax purposes has no relation whatsoever to your immigration status.

The tax authority has been given the authority by the Diet to ask you about your foreign assets. That is appropriate authority.

^dis here^

three things in life that you are not supposed to understand... politics, taxes and women. just nod your head and comply.

[Wage Slave]

Home country as in you are a citizen of...meaning some of the info Japan is seeking here isn't legally given out without it being specifically sought after and with appropriate warrants and authority.

That has changed dramatically in the last couple of years. Basically they have all got together and agreed to share information - and share it by giving direct electronic access. This includes the US as well as many former tax havens. Someone over at GP was convinced that because he was an American Citizen he was protected - Everything I have read indicates that is not true. They are all in it together.

[matsuki]

Home country as in you are a citizen of...meaning some of the info Japan is seeking here isn't legally given out without it being specifically sought after and with appropriate warrants and authority.

That has changed dramatically in the last couple of years. Basically they have all got together and agreed to share information - and share it by giving direct electronic access. This includes the US as well as many former tax havens. Someone over at GP was convinced that because he was an American Citizen he was protected - Everything I have read indicates that is not true. They are all in it together.

I guess that is the answer I was looking for. With that much collusion, you're fucked. I have no delusions about being "protected" from any kind of taxation...that being said, tax deductions at any and every possible level seem to work well when it comes to beating down what's owed here...so there's that.

[Samurai_Jerk]

There are laws in a lot of countries that would prevent banks from handing your personal information over to foreign governments. That's why the tax authorities are colluding. Government doesn't have to respect your privacy the way a business does. It makes perfect sense that countries want to tax the worldwide income of their residents whether they're citizens or not. Would it be fair for me to set up an offshore business in a tax haven and work remotely from Japan while never paying income tax on that money? Or to keep all my retirement investments offshore and then fuck off when I hit retirement not having to pay taxes that people who remain in that country do?

The inheritance tax thing definitely sucks if you're American since there's no federal inheritance tax (some states have inheritance taxes) and the estate tax exclusion is over five million dollars. I've always though that was kind of strange because one guy can inherit five million bucks tax free but if 20 people inherited a ten million dollar estate it would be taxed before being divided among them. Anyway, it sucks but that's life. Should the government not require you to pay a tax that all other residence have to pay just because you're a US citizen?

[IparryU]

There are laws in a lot of countries that would prevent banks from handing your personal information over to foreign governments. That's why the tax authorities are colluding. Government doesn't have to respect your privacy the way a business does. It makes perfect sense that countries want to tax the worldwide income of their residents whether they're citizens or not. Would it be fair for me to set up an offshore business in a tax haven and work remotely from Japan while never paying income tax on that money? Or to keep all my retirement investments offshore and then fuck off when I hit retirement not having to pay taxes that people who remain in that country do?

You got the first part right, but wrong. No financial institution can give info to any outside government/tax authority, very true. BUT they do have to report all that info to their tax authority... which they will then relay to whomever else depending on their guidelines. So your shit is being given out, but probably not distributed to Uncle Sam unless you have an account over USD125K as of Dec 2013. Note that if an American has more than USD 500K in an account, they will do a hard paper check (meaning pull your file and send it along with the report) and your shit is top priority for pushing down the pipe to get reported.

The inheritance tax thing definitely sucks if you're American since there's no federal inheritance tax (some states have inheritance taxes) and the estate tax exclusion is over five million dollars. I've always though that was kind of strange because one guy can inherit five million bucks tax free but if 20 people inherited a ten million dollar estate it would be taxed before being divided among them. Anyway, it sucks but that's life. Should the government not require you to pay a tax that all other residence have to pay just because you're a US citizen?

I think it is 6.4M is tax free then anything after that is 35% or some shit like that. There is also some loopy thing where spouses can combine their estate, making it a total of 12.8M tax free and 35% after that, but this is where I need to research on. So much state by state and federal level BS that is required.

[Samurai_Jerk]

You got the first part right, but wrong. No financial institution can give info to any outside government/tax authority, very true. BUT they do have to report all that info to their tax authority... which they will then relay to whomever else depending on their guidelines.

How was I wrong since you basically just said the same thing I did? You really need to work on your English ability.

[IparryU]

You got the first part right, but wrong. No financial institution can give info to any outside government/tax authority, very true. BUT they do have to report all that info to their tax authority... which they will then relay to whomever else depending on their guidelines.

How was I wrong since you basically just said the same thing I did? You really need to work on your English ability.

because they do not report it externally... but someone else does on their behalf. same result, different process and "offshore" is an old, outdated term now.

[Samurai_Jerk]

because they do not report it externally... but someone else does on their behalf.

That's basically what I wrote.

[IparryU]

because they do not report it externally... but someone else does on their behalf.

That's basically what I wrote.

:wall::wall::wall::wall:

[Samurai_Jerk]

because they do not report it externally... but someone else does on their behalf.

That's basically what I wrote.

:wall::wall::wall::wall:

Still having trouble reading between the lines?