A Couple of News Stories

Worth thinking about


TGIF?

April in Japan is brutal, eh? I’m reeling at the moment, smashed by hayfever, the start of the school year, and trying to figure out whether to apply for promotion at my job.

So, today is going to be a short and sweet post 🙂

I saw this guide to the Japanese state pension system today. It’s an okay overview and worth a couple of minutes if you don’t know where to get start.

Then you could look at some of our blog posts on the subject:
The Japanese Pension System
Japan Pensions
How’s Your Pension Doing?
The Ghost of Pension Future
Pensions Mercer Report
Japanese State Pension

The other story is this Huffington Post piece on Japanese inheritance tax rule changes. Quite a few people have sent it to me, and it the subject seems to be worth looking into. Unfortunately, the piece is quite badly written. It’s difficult to understand, exaggerates the issue, and seems like a self-interested rant.

Once I figure out the situation I’ll write a full blog post on the topic. In the meantime, please feel free to provide opinions and information in the comments 🙂

7 Responses

  1. I look forward to your thoughts because this is one area of the law I really need to be clear on.

    1. If you’re British, you are now supposed to register your My Number for any UK bank accounts. Looks like they are setting up a system where they could potentially catch you.

  3. Hello Ben
    The changes to the inheritance rules seem to be a knee-jerk reaction by the Japanese tax authorities for losing a legal battle due to one of its citizens exploiting a loophole.
    Quoted from one of the articles that was sent to you previously:
    “Why is the Japanese Tax Agency cracking down on foreigners now? Especially when the government is making an effort to attract high-value immigrants to settle here?
    Our take is that this latest slew of tax regulations could be called the “Takefuji Revenge”. We say this because of the well-known case of the NTA losing a judgement against the son of late loan-shark Yasuo Takei (who owned Takefuji).
    The son, Toshiki Takei, was able to live in Hong Kong for 3 years, receive JPY160bn in Takefuji shares from his parents while there, then return to Japan without paying gift tax of JPY130m. The Tax Office had him arrested in 2005 on tax avoidance, but after a determined court battle that went all the way to the Supreme Court, Takei was found innocent in 2011.
    So, now in FY2016, the minimum period a Japanese or permanent resident would have to live overseas to avoid taxation in Japan will be 5-10 years (with 10 years being safe). And of course you should not qualify as being tax resident during that period.”
    Source: http://bit.ly/2mhluaY
    We also see this pattern repeating itself in the tax exemption scheme for dependents after one Japanese exploited it to pay literally no taxes, due to his spouse being a Filipino national.

  4. Given that Japan has tax treaties with most countries, does that really matter? If you moved back to the US or the UK and inherit money, you’d have to pay inheritance tax there. I assume (I might be wrong) this new system will work in a way that avoids double taxation. Pay your inheritance tax to one country or the other, does it really matter? Or is the tax burden that much higher in Japan on inheritance?

    1. Good point. I haven’t really had time to look into this yet, but I can see a few issues:
      1. being liable for tax up to ten years after leaving Japan seems problematic. It’s like the current US arrangements: could well cause unforeseen problems.
      2. Japanese inheritance does seem on the high side
      3. it seems as though it may be possible to pay tax on the estate abroad, then pay tax individually again to Japan
      Probably deserves a blog post (or three) at some point 🙂