Declaring capital gains

[Kiro]

Hi forum!

A question regarding declaring the capital gains in Japan, I would appreciate the help.

I picked tax withholding 源泉徴収ありwith my Japanese broker, so my understanding is that they do the calculation for me and are withholding the 20.315% tax directly, so what I get on my account is after taxes are already paid off.

In 2020 I did not sell anything and thus had no capital gains (nor losses) to declare during the March 2021 確定申告 (I did have a very small dividend income which had the tax withheld by the broker).

This year 2021, I did sell and have some capital gain (and a little dividend income). Taxes are being withheld by the broker every time.
I am doing a 確定申告 in March 2022 as I have to declare some outside of regular salary things.
Do I have to include every gain and dividend even though the 20.315% tax is already being withheld by the broker every time?
If that is the case, would I have to pay (again) the 20.315% by myself and then ask the broker to refund me what they withheld in 2021?
Or I should not include them since the tax was already withheld directly by my broker?

Thanks for your help!

[RetireJapan]

Your broker will have sent you (or have available on their website) a tax withholding statement (源泉徴収票).

You can submit it to the tax office as part of your tax return. My understanding is that you are not obliged to do this, and can just ignore any dividends/capital gains in a 特定口座. Your accountant/the tax office can give you specific advice on this.

[Kiro]

Thank you, this helps.
If it’s just about printing and adding to my kakuteishinkoku the recap paper received/uploaded from the broker, then i’m fine with that.
I was afraid I would have to write down by myself again every single capital gain line for something which has already been done/tax withheld by the broker.
(I’ll ask the tax office/broker at the end of the year just in case)

[Kiro]

Sorry one more question.
What happens when selling without a capital gain nor a loss, so basically when selling a stock at the exact same price as the price it was bought for (for whatever reason)?
Should it be declared as 'Capital gain: 0'? Or not declared since there is no gain?

[RetireJapan]

The default with a 特定講座 is no declaration (原則確定申告不要). If you choose to declare, you just submit the documents from the broker. No need to do it yourself manually.

[Tkydon]

If the total of your Capital Gain and Dividend Income is less than (correction) Y200,000 in any one year, AND you have had the 20.315% tax withheld at source, then you do NOT need to file a Kakutei-shinkoku, or report it in your Kakutei-shinkoku for other purposes.

If the total of your Capital Gain and Dividend Income exceeds (correction) Y200,000 in any one year, then you DO need to file a Kakutei-shinkoku, even if Tax was withheld. The Broker will issue the Receipt of Tax Withheld - Gensenchoshu - and you enter that into the Kakutei-shinkoku.
You have to make sure you Select Separate Taxation Method to get the 20.315% Tax Level, and you will not have to pay anything additional.
If you do NOT Select Separate Taxation Method to get the 20.315% Tax Level, you will have to pay Tax at your Marginal Salary Tax Rate, so you will get an additional bill.

If you have any Capital Gain and Dividend Income that has not had the 20.315% tax withheld at source, or overseas Income that has not been subject to Japanese Withholding, then you DO need to file a Kakutei-shinkoku, select Separate Taxation Method and pay the 20.315% tax.

HTH.

[RetireJapan]

If the total of your Capital Gain and Dividend Income exceeds Y100,000 in any one year, then you DO need to file a Kakutei-shinkoku, even if Tax was withheld. The Broker will issue the Receipt of Tax Withheld - Gensenchoshu - and you enter that into the Kakutei-shinkoku.

You keep saying this, but I don't think it is correct. Every single Japanese source I have seen that talks about 特定口座（源泉徴収あり）says the same thing: no tax return is required （確定申告不要）. This includes the broker websites and books on investing.

Here's the Rakuten one as an example: https://www.rakuten-sec.co.jp/web/support/tax/specific/

It's also what the tax office in Sendai told me. And my wife's accountant.

Does anyone else here file their dividends/capital gains from tokutei accounts?

[Kiro]

Wasn't it if the total amount of capital gains and dividends are above 200,000 JPY rather than 100,000 JPY?
Also, I was under the impression that for capital gains, it was always separate taxation at 20.315% (and dividends from Japanese stocks can be selected at either separate taxation or aggregate... but I may be mistaken on this one)?

And lastly, I too thought that 特定口座（源泉徴収あり）means no tax return is required since the broker does all the calculation, withholds the taxes, and sends all the papers to the tax office.
What I was wondering though is whether or not I need to submit these papers again myself, since I have to do a tax return anyway for other things. I would not want to be taxed twice on the same thing...

I'll definitely need to ask my broker and the tax office to confirm if it is a must or not.

[Tkydon]

Sorry, slip of the finger earlier. Didn't double check. Yes the limit if not having to file is Y200,000 in non-Employment Income / non-Pension Income.

https://www.nta.go.jp/english/taxes/ind ... 020/01.pdf

Page 11 Refers

You are required to file a final return if;
(1) Your total amount of the earnings of salary etc. exceeds 20,000,000 yen.
(2) Your total amount of income (except for the employment income and the retirement income)
exceeds 200,000 yen when the salary (should read Income) etc. is received from one source only and all of the
salary (should read Income) etc. is subject to the Japanese withholding.
(3) The sum of your total amount of income (except for the employment income and the
retirement income) and the total amount of earnings from the salary (should read Income) etc. not subject to the
year-end adjustment exceeds 200,000 yen when the salary (should read Income) etc. is received from two or more
sources and all of the salary (should read Income) etc. is subject to the Japanese withholding.
*However, you need not file a final return if the remaining amount after subtracting the total amount of
deductions for income (except for deductions for casualty losses, medical expenses and donations and
basic exemption) from your total amount of earnings from salary etc. is 1,500,000 yen or less as well as your
total amount of income (except for the employment income and the retirement income) is 200,000 yen or
less when all of the salary etc. is subject to the Japanese withholding.

So this says, even if the income has been subject to Japanese withholding, if the total amount of income (other than employment income and retirement income), so any of other types of income listed on Page 8, which is not subject to the year-end adjustment exceeds 200,000 yen, you have to file, even if tax has been withheld.

If you have Japanese income that has not been subject to withholding (Not in a Tokutei Acct, etc.) or Foreign Income which is not subject to Japanese Withholding then you must file that income over Y0 in Kakutei-shinkoku.

And lastly, I too thought that 特定口座（源泉徴収あり）means no tax return is required since the broker does all the calculation, withholds the taxes, and sends all the papers to the tax office.
What I was wondering though is whether or not I need to submit these papers again myself, since I have to do a tax return anyway for other things. I would not want to be taxed twice on the same thing...

If your total Income, other than Employment Income or Pension Income is less than Y200,000 then you do not need to submit these papers again.
If your total Income, other than Employment Income or Pension Income is more than Y200,000 then you DO need to submit these papers again.

I was thinking of Dividend and Interest Income, where you have the choice of Aggregate or Separate Taxation.
Make sure you fill out Form B Pages 1&2 And Page 3 for Separate Taxation Method.

[RetireJapan]

https://www.nta.go.jp/english/taxes/ind ... 020/01.pdf

Page 11 Refers

You are required to file a final return if;
(1) Your total amount of the earnings of salary etc. exceeds 20,000,000 yen.
(2) Your total amount of income (except for the employment income and the retirement income)
exceeds 200,000 yen when the salary (should read Income) etc. is received from one source only and all of the
salary (should read Income) etc. is subject to the Japanese withholding.
(3) The sum of your total amount of income (except for the employment income and the
retirement income) and the total amount of earnings from the salary (should read Income) etc. not subject to the
year-end adjustment exceeds 200,000 yen when the salary (should read Income) etc. is received from two or more
sources and all of the salary (should read Income) etc. is subject to the Japanese withholding.
*However, you need not file a final return if the remaining amount after subtracting the total amount of
deductions for income (except for deductions for casualty losses, medical expenses and donations and
basic exemption) from your total amount of earnings from salary etc. is 1,500,000 yen or less as well as your
total amount of income (except for the employment income and the retirement income) is 200,000 yen or
less when all of the salary etc. is subject to the Japanese withholding.

So this says, even if the income has been subject to Japanese withholding, if the total amount of income (other than employment income and retirement income), so any of other types of income listed on Page 8, which is not subject to the year-end adjustment exceeds 200,000 yen, you have to file, even if tax has been withheld.

That does not mention 特定 accounts, so my impression is that they are a special case and an exception to that rule (as indicated pretty much everywhere). The 'Japanese withholding' would seem to refer to withholding from part-time wages, etc.

This document appears to confim this: https://www.nta.go.jp/taxes/shiraberu/t ... u/1476.htm