10 Q&As about the new NISA

[sutebayashi]

You’ll be double taxed on US stock dividends I think - the US will have their share, then Japan will want their share, but you can claim some back.
The triple taxation issue comes into play when the US ETFs are investing in non-US assets whose jurisdiction also taxes at the source.
The tax issue is a plus for sticking with mutual funds.

Personally I didn’t find the kakutei shinkoku process to get some tax back to be too difficult, although I wonder if I actually did it correctly… I usually do kakutei shinkoku since before I owned these ETFs so it was ok.
But sticking with Japanese mutual funds is much easier.

It would be kind of interesting as an experiment to open an account, buy say 100,000 yen worth of some ETF, and 100,000 yen worth of a close equivalent mutual fund, then hold for 1,2,5 years, the sell both and see which one actually produced better results. Maybe someone knows of a blog article that actually shows the real life results? The theory is fine, but I want to actually see the results, since if I were selling mutual funds, I would sure as heck be trying to make some profit out of the venture.

[ToushiTime]

OK thanks. I think I'll stick with Japanese mutual funds, unless I find a US ETF that justifies the hassle of claiming the tax back.

[adamu]

Also, do you find it easy reclaiming the US tax paid on those ETFs?
I think Adamu mentioned something about the Japanese brokerages providing the necessary tax documents.

You need to submit one of these along with your tax return.

Thankfully eTax helps you out, but not much.

https://www.nta.go.jp/taxes/shiraberu/s ... df/058.pdf

[ToushiTime]

Thanks, I've bookmarked that, in case I ever need it.

[thejunman]

I'm currently on a regular NISA (since August 2021) and it is due to run for 5 years - would it be better wait until the 5 years is nearly up before transferring to the new NISA or should I transfer to it as soon as possible?

[goodandbadjapan]

I'm currently on a regular NISA (since August 2021) and it is due to run for 5 years - would it be better wait until the 5 years is nearly up before transferring to the new NISA or should I transfer to it as soon as possible?

As I understand it, your 2021 NISA will still run until 2026, but you can open a new NISA in 2024. In other words, you can open a new NISA each year just as before, but from next year the one you open will be in the new NISA format. The only difference is you can't rollover from old to new, so those with an old NISA coming to its five year-limit will need to sell that and repurchase funds for new NISA, or just move the old ones into a taxable account and start a new NISA with new funds. Hope someone will correct me if I have got that wrong!

[thejunman]

I'm currently on a regular NISA (since August 2021) and it is due to run for 5 years - would it be better wait until the 5 years is nearly up before transferring to the new NISA or should I transfer to it as soon as possible?

As I understand it, your 2021 NISA will still run until 2026, but you can open a new NISA in 2024. In other words, you can open a new NISA each year just as before, but from next year the one you open will be in the new NISA format. The only difference is you can't rollover from old to new, so those with an old NISA coming to its five year-limit will need to sell that and repurchase funds for new NISA, or just move the old ones into a taxable account and start a new NISA with new funds. Hope someone will correct me if I have got that wrong!

I have an account with Rakuten Securities at the moment (since 2021, as I have already mentioned) so do I need to do anything if I want to continue using the NISA account with Rakuten Securities?

For example, do I need to inform that I want to switch to the new NISA or does it automatically from next year? I know this is the case if you want to switch from ordinary NISA to Tsumitate NISA, and vice versa.

So to just to be clear. For my investments made in 2021, I would need to sell them before the end of 2025 and repurchase them in the same account and then they would be part of the the new NISA from next year.

[adamu]

I have an account with Rakuten Securities at the moment (since 2021, as I have already mentioned) so do I need to do anything if I want to continue using the NISA account with Rakuten Securities?

No, it should be automatic.

For example, do I need to inform that I want to switch to the new NISA or does it automatically from next year?

Automatically.

For my investments made in 2021, I would need to sell them before the end of 2025 and repurchase them in the same account and then they would be part of the the new NISA from next year.

No. Investments made in 2021 will stay in the old account until 2025 when their tax free period expires and they are moved to a taxable account in 2026, or until you sell them.

Investments made in 2024 will be in the New NISA subject to the new rules.

Please see the wiki for details.
https://retirewiki.jp/wiki/NISA

[thejunman]

I have an account with Rakuten Securities at the moment (since 2021, as I have already mentioned) so do I need to do anything if I want to continue using the NISA account with Rakuten Securities?

No, it should be automatic.

For example, do I need to inform that I want to switch to the new NISA or does it automatically from next year?

Automatically.

For my investments made in 2021, I would need to sell them before the end of 2025 and repurchase them in the same account and then they would be part of the the new NISA from next year.

No. Investments made in 2021 will stay in the old account until 2025 when their tax free period expires and they are moved to a taxable account in 2026, or until you sell them.

Investments made in 2024 will be in the New NISA subject to the new rules.

Please see the wiki for details.
https://retirewiki.jp/wiki/NISA

Thanks a lot, that's exactly the information I wanted.