FG Income Tax Loophole Set To Close

[Mulboyne]

Asahi: Foreign tax break targeted

The government plans to eliminate in April 2006 a loophole that lets non-permanent foreign residents earn tax-free income from foreign sources. Non-permanent foreign residents who have resided in Japan for less than five years and do not plan to seek permanent residency are exempt from taxes on income earned abroad, such as interest on deposits and revenue from real estate in their home countries. They are required to pay tax only on income they earn in Japan.

In an attempt to qualify for the tax break, some non-Japanese employees at foreign-affiliated companies have repeated temporary transfers out of Japan so that their continuous residence does not exceed five years, Finance Ministry sources said. The government will submit a bill to revise the Income Tax Law to the ordinary Diet session, to convene on Friday. The revised law would require foreign residents working mainly in Japan to report all income from foreign sources and to pay income tax on the earnings.

The tax break would be limited to residents who do not have Japanese nationality and have lived in Japan for five years or less in total during the past 10 years. The domestic tax authorities will exchange information with their foreign counterparts to track down incomes earned overseas. Under the revised law, Japanese will not be granted the tax break even if they claim they are not permanent residents. Currently, some Japanese attempt to take advantage of the tax break by declaring they have no intention to live permanently in Japan

[AssKissinger]

What a fucking joke. They have no idea what you earn overseas and have no fucking way to collect it.

[Taro Toporific]

What a fucking joke. They have no idea what you earn overseas and have no fucking way to collect it.

This was true, but the US and Japan have started to swap tax/income info. As the article says, " The domestic [Japanese] tax authorities will exchange information with their foreign counterparts to track down incomes earned overseas."

Computer-wise, this is not so difficult but until last year Japan did not have an integrated tax computer system. The Japan system is still primative (no Japan "Social Security" style tax ID numbers) but it's only a matter of time.

The other factor is that as a practical matter taxing overseas earnings is only something the folks making more the 10 million yen / $100,000 USD need to worry about. Engrish teachers won't be targeted for a long while.

[IkemenTommy]

This was true, but the US and Japan have started to swap tax/income info. As the article says, " The domestic [Japanese] tax authorities will exchange information with their foreign counterparts to track down incomes earned overseas."

This... all because of 9-11?
What a crock!

[Currawong]

It gets worse, a man paying off the large sum of US$6,000 was interviewed by Homeland Security because of the "unusual" payment.

[American Oyaji]

That's just messed up.

[Charles]

It gets worse, a man paying off the large sum of US$6,000 was interviewed by Homeland Security because of the "unusual" payment.

Well actually, he wasn't interviewed by DHS, he was just flagged for further inquiry and his financial info was stored in a secret FBI database. Undoubtedly his bank (and probably other companies) were sent a "National Security Letter" which demanded the surrender of further financial information to the FBI.

The same thing happened to me. I paid off my credit card in one lump sum and my account didn't get credited for weeks. Now I know why.

It continually amazes me that when the government wants to catch foreign terrorists, their guns are always pointed at law-abiding American citizens.

[Greji]

-snip-It continually amazes me that when the government wants to catch foreign terrorists, their guns are always pointed at law-abiding American citizens.

Why Charles, that sounds a bit like the old cry from the block, "Help the paranoids are after me!". The answer to your worries are quite simple, don't be a law-abiding citizen!

BTW when they arrest you and drag you off to Gitmo, can I have your new Mac?