Post by Tokyo » Mon May 17, 2021 9:09 am
@futureplanner
As to share-based income, my Japanese accountant assures me that no declarations are needed since tax is automatically deducted at the source. Good news!
This is true only if your shares are in Japanese corporations, and held with Japanese brokers.
See Pages 56-57 of the 2020 Tax Guide here:
https://www.nta.go.jp/english/taxes/ind ... /index.htm
If you hold International Equities through overseas brokers, they may or may not be subject to Withholding.
Whether you are a US citizen or not, Dividends on US Stocks are subject to US Withholding Tax at 30%, unless you claim the reduced rate of withholding of 10% under the US Japan Tax Treaty.
You can then claim the amount of Tax paid in the US as a Foreign Tax Credit on your Japanese Tax return. See Page 47.
Dividends are taxed at 15% National Tax, 0.315% Reconstruction Tax, and 5% Resident's Tax.
If you paid tax in US, then you can claim that as a Credit, off-setting the Japanese Tax.
If you are not a US Citizen, Capital Gains are not taxed in the US, but you would have to report the gains here, and pay the appropriate tax.
If you are a US Citizen, Capital Gains are taxed in the US. You would have to report the gains gross here, and pay the appropriate tax, but can claim the Foreign Tax Credit for Tax paid in the US. See Page 47.
In the Tax Return all categories of income contribute to the final Total Income number (See Page 10); Employment Income, Dividend Income, Interest Income, Real Estate Income, Business Income, Miscellaneous Income which includes Pensions, Royalties, Paid Engagements and Annuities, etc., Capital Gains, Occasional Income and Retirement Income...
It is not necessary to file if tax is withheld at source, but not all sources are subject to withholding, so those would require a filing.
I haven't really adjusted budget numbers yet just trying to get a rough idea of required payments. There will be enough left over for fun I'm sure 