Reporting US investments to Japanese Tax Office

[jeronimoski]

Hi all,

My US taxes are not a problem. I fill out the FEIC and also fill in the numbers for my dividends from Vanguard and Robinhood. My US taxes are fine. No problems filling those out.

My question is this. I have one job in Japan. I get one tax form at the end of the year. Do I need to go to my local tax office and tell them how much in dividends I made from my investments with Robinhood and Vanguard?

[captainspoke]

If you are a tax resident (here for five years or longer), or if you bring any of the dividends/gains/distributions into japan in any year prior to that, then yes, you have to file a tax return and report your worldwide income.

[RetireJapan]

I believe non-work income (investments, dividends, rent, etc.) is no longer exempt for the first five years. This is a change from 2017. Investment income is now deemed to occur where the person is resident, not where the assets are held.

[jeronimoski]

If you are a tax resident (here for five years or longer), or if you bring any of the dividends/gains/distributions into japan in any year prior to that, then yes, you have to file a tax return and report your worldwide income.

I have my Robinhood settings to reinvest any dividends that I get. So I don't have to report them to the Japanese tax office, right?

I've had mutual funds for a couple decades and those dividends are reinvested, so I've never said anything to my tax offices here. Have I been doing something wrong? Oh, I've been here for 9 years.

Not sure about Vanguard since I just opened that account up two months ago. I'll have to ask them what they do about dividends.

[captainspoke]

If you are a tax resident (here for five years or longer), or if you bring any of the dividends/gains/distributions into japan in any year prior to that, then yes, you have to file a tax return and report your worldwide income.

I have my Robinhood settings to reinvest any dividends that I get. So I don't have to report them to the Japanese tax office, right?

I've had mutual funds for a couple decades and those dividends are reinvested, so I've never said anything to my tax offices here. Have I been doing something wrong? Oh, I've been here for 9 years.

Not sure about Vanguard since I just opened that account up two months ago. I'll have to ask them what they do about dividends.

• I'm not a tax expert, but the fact that you've set dividends to reinvest is irrelevant--something was paid to you, you should be reporting it.

• And nine years means you should have been reporting these things for a while now. And for a longer "while" if what RetireJapan says is true (at least since that change was made).

• If by "ask them" you mean ask Vanguard: No, you should be visiting your local tax office and asking them--the people there at the tax office--what to do about your dividends.

[captainspoke]

Again, not expert in this, but I've never heard (US) where you can opt for shares instead of cash. For US reporting, even if you have things set for 'reinvest dividends', you'll still be reporting as tho those funds were paid and then you bought shares at the same time.

There are, however, some cases in which a 'dividend' payout comes in actual shares. In those cases, actual shares are awarded to stockholders (sometimes with a bit in cash to make up for a partial share). Sometimes a payout in actual shares is done by a split, so in the case of a 5% payout, the split would be 105:100, giving five added shares for every 100 owned. (VGR, a smaller tobacco company, has 'paid' dividends this way in the past--note the S vs D distributions in the chart.) In this latter case, where investors receive shares directly, there is no dividend taxation at the time, but only when the shares are sold. (again, AFAIK)

Even DRIPs are taxed in the US as tho a dividend was actually paid.

[captainspoke]

Interesting--a first! Thanks.

But I'd hesitate ("Yeah, but..."), since that's a biz development company, and may not exemplify the more general market.

No need for more examples, but how often do your see that option?

[captainspoke]

Also, while that's a stock/company, OP is talking about robinhood and vanguard. I'm guessing, but likely (mostly?) funds, and not individual stocks.

Are there any ETFs or mutual funds where you can make that kind of selection?

[RetireJapan]

The US seems to tax reinvested dividends: Japan does not. I guess the question is how does Japan treat reinvested US dividends?

Only the tax office can answer that one, unless someone else has direct experience of this?

[jeronimoski]

If you are a tax resident (here for five years or longer), or if you bring any of the dividends/gains/distributions into japan in any year prior to that, then yes, you have to file a tax return and report your worldwide income.

I have my Robinhood settings to reinvest any dividends that I get. So I don't have to report them to the Japanese tax office, right?

I've had mutual funds for a couple decades and those dividends are reinvested, so I've never said anything to my tax offices here. Have I been doing something wrong? Oh, I've been here for 9 years.

Not sure about Vanguard since I just opened that account up two months ago. I'll have to ask them what they do about dividends.

• I'm not a tax expert, but the fact that you've set dividends to reinvest is irrelevant--something was paid to you, you should be reporting it.

• And nine years means you should have been reporting these things for a while now. And for a longer "while" if what RetireJapan says is true (at least since that change was made).

• If by "ask them" you mean ask Vanguard: No, you should be visiting your local tax office and asking them--the people there at the tax office--what to do about your dividends.

With Robinhood, my ETFs and individual stocks are set to automatically buy more shares.

And regarding my Vanguard comment, I was talking about asking them what they do with dividends and reinvesting. Of course I know that I wouldn't ask Vanguard about my tax situation in Japan.

Your initial comment said "bring" as in bring into Japan, so that was unclear. Cause I haven't "brought" any of my money into Japan. It's all been reinvested and nothing has been sold.