If the total of any income, other than your employment income for which Income Taxes have been withheld, is less than Y200,000, then you need do nothing.
If you are in regular employment (added), and the total of any income, other than your employment income for which Income Taxes have been withheld, is greater than Y200,000, then you need to declare it in your Kakutei Shinkoku.
Interest Income is declared as Aggregate Income, at your Marginal Tax Rate (National Marginal Tax Rate, 0.21% of National Marginal Tax Rate as Reconstruction/Defence Tax, and 10% Residents' Taxes).
Capital Gains on Equities is declared as Separate Income, at the Capital Gains Tax Rate of 20.315% (15% National, 0.315% Reconstruction/Defence, and 5% residents' Taxes)
With Dividend Income, you have the choice whether you want the Dividends to be taxed as Separate Method Dividend Income at the Dividend ax Rate of 20.315% (15% National, 0.315% Reconstruction/Defence, and 5% Residents' Taxes), or Aggregate Method at your Marginal Tax Rate (National Marginal Tax Rate, 0.21% of National Marginal Tax Rate as Reconstruction/Defence Tax, and 10% Residents' Taxes).
If you have made the investments in a Tokutei Account with Withholding - Gensen Choshu - then they will handle the tax for you.
The calculations are a little complex, but Japanese Dividends on Japanese Stocks are entitled to a Dividend Tax Credit. Overseas Dividends are not.
If you have mostly Japanese Dividend Income AND your Total Taxable Income is less than about Y6.6M, then it might be better to select the Aggregate Taxation Method.
If you have mostly Overseas Dividend Income AND your Total Taxable Income is less than about Y3.3M, then it might be better to select the Aggregate Taxation Method.
Otherwise, it would be better to select the Separate Taxation Method.
akiaji wrote: ↑Sat Jan 14, 2023 2:56 pm
a) I exchanged JPY to USD to buy ETFs on a few occasions. I know I need to keep track of these rates for the future when I sell & exchange back to JPY to check for FX gain/loss, but do I need to do anything while just holding the ETFs?
A) You need to keep track of the Purchase Price in Yen, and future taxes will be based on the Average Price paid across all purchases of the same instrument when you sell.
akiaji wrote: ↑Sat Jan 14, 2023 2:56 pm
b) I participated in their Stock Yield Enhancement Program (for what ended up a super small amount of interest paid). I assume this is income I need to take into consideration.
B) Yes, you can take interest paid as a credit against the gain in the future. Interest received will be taxable as Aggregate Income.
akiaji wrote: ↑Sat Jan 14, 2023 2:56 pm
c) The slightly larger one is dividends. I have set to automatically reinvest, but from what I see, dividends from ETFs (分配金)are taxable whether they are cashed out or reinvested.
C) Yes, see above. As the ETF Dividend is distributed to you before being reinvested, it is taxable.
On the other hand, if there was a similar Mutual Fund and the Dividends were reinvested inside the Mutual Fund without being distributed to you, they would not be taxable.
akiaji wrote: ↑Sat Jan 14, 2023 2:56 pm
Since the IBKR statements will be in base currency USD, I am curious how the Japan tax agency likes to have these converted to JPY for the tax return. Is there an official FX rate that the tax agency publishes. Can I use something like Oanda with the 31st December FX rate, etc.?
Yes, the Japanese Tax Agency does all of their calculations in Yen Values so you need to keep track of Exchange Rates on transaction dates.
You can use the rates posted here:
http://www.murc-kawasesouba.jp/fx/past_3month.php
See the bottom for downloads by Year since 1990...