Using International Credit Card based on Country with stronger currency

[tofusoba14]

Hello,

As everyone knows, the JPY is very weak with respect to the USD. Seen from the past graphs, it seems that JPY will recover sometime in the future, however no one can predict how long will it be so weak.

So in such times, would it be better to use a foreign credit card based on stronger currency for all purchases (daily grocery etc). Even thought the card may have some charges, still it will result in saving money.

I understand just remitting-inwards would be the best way to go, however I do not know how to declare tax in that case because i am a company employee, so i do not file my own tax.

Does anyone have any thoughts about the same ?

Thanks

[Beaglehound]

Remitting money in will not attract extra tax, unless you have been here for less than 5 years and have overseas income.

[tofusoba14]

Thanks for the response.

Well, for example, 2 years ago, i remitted-outward some of my savings at USD/JPY rate of 105.
Now, this year, if i remit-inward the same money at USD/JPY rate of 134.
This clearly shows a gain i made over the exchange, which will be subject to tax ? is that incorrect in any way ?

[captainspoke]

Thanks for the response.

Well, for example, 2 years ago, i remitted-outward some of my savings at USD/JPY rate of 105.
Now, this year, if i remit-inward the same money at USD/JPY rate of 134.
This clearly shows a gain i made over the exchange, which will be subject to tax ? is that incorrect in any way ?

Yes. I've read elsewhere that any remittance is an f/x event, and technically, should be accounted for.

Practically speaking, especially since I'll someday be using a foreign card like this, I hope that some low/reasonable level of card activity will 'fly under the radar'.

[niall24]

If your inward remittance is above a certain amount (1 million yen, I have heard) the bank reports it to the tax office.

If the remitted money is part of your income (salary, inheritance, cash windfall, a present from rich uncle, etc). you should declare it (assuming you are tax-resident), as taxable income. (However if you are a "salaryman" -- ie. company employee, you only need to declare it if your "miscellaneous earnings" (including overseas earnings) are more than 200,000 yen in one year.

If the money is not income, but merely a transfer of previously earned income, you obviously dont have to declare it as income, but you might have to tell the tax people where the funds come from, if they contact you. If you can explain where the money came from and preferably have some documentation, then no problem.