Do I need to fill out the OAR, AAL, both?

[FaiyaaJapan]

I’m trying to figure out if I need to be filling out the Overseas Asset Report, Assets and Liabilities forms, or both.

Our details:
My wife and I are on work visas. We have been in Japan for approximately 18 months. We do hold assets worth more than 500 million JPY (thanks to the weak yen) overseas, which from my understanding is the limit to fill out the form. We do not make more than 200 million yen a year in income.

My confusion stems from what triggers the need to file these forms? Is it being a tax resident AND holding assets over the limit? Is it being a tax resident OR holding over the limit? And i'm not sure what the different between the OAR and the AAL forms really are?

I'd like to do thing correctly as we do plan on applying for residency at some point in the future.

[RetireJapan]

My wife and I are on work visas. We have been in Japan for approximately 18 months. We do hold assets worth more than 500 million JPY (thanks to the weak yen) overseas, which from my understanding is the limit to fill out the form. We do not make more than 200 million yen a year in income.

Are you sure about these numbers? The amount you need to declare overseas assets is 50 million yen, not 500 million.

(5000万, 50,000,000)

[FaiyaaJapan]

Whoops, yes I did make a mistake. But isn't the amount 100 million?

I've been going off of this article here https://www.tytoncapital.com/projects/j ... shore-tax/ which is old so maybe it changed. Either way we do have more than the threshold.

[TokyoWart]

Keep in mind that these numbers are based on the individual, not the couple, because you file taxes here as an individual. You need to make the determination separately for your wife and for you. If you have to submit one of them it's not uncommon to also have to submit the other in my experience.

Here is an explanation of the rule and how it is changing:

Reporting on assets and liabilities

A person having an obligation to file a Japanese income tax return is required to file a report on his/her assets and liabilities, if, as of 31 December each year:
1. his/her total income exceeds JPY 20m; and
2. either (i) the total value of his/her assets is JPY 300m or more, or (ii) the total value of his/her securities, unsettled derivative transactions and certain financial products, is JPY 100m.

Reporting on foreign assets

A permanent resident of Japan is required to file a report on his/her assets held outside Japan, if such assets have a total net fair market value exceeding JPY 50m as of 31 December each year.

Since wealthy individuals having relatively small taxable income fell outside the scope of this reporting on assets and liabilities under category (1) above, the 2022 annual tax reform expanded the scope of reporting for category (1) so that a resident of Japan is required to report his/her assets if the total value of his/her assets is JPY 1bn or more as of 31 December each year, regardless of the amount of his/her taxable income in that year.At the same time, in order to mitigate the administrative burden on taxpayers, the filing due date of reports under either category (1) or category (2) was extended from 15 May to 30 June of the following year of each calendar year

https://www.ibanet.org/document?id=Taxe ... Japan-2022

[RetireJapan]

Whoops, yes I did make a mistake. But isn't the amount 100 million?

I've been going off of this article here https://www.tytoncapital.com/projects/j ... shore-tax/ which is old so maybe it changed. Either way we do have more than the threshold.

That article is kind of confusing. Here is KPMG's version: https://assets.kpmg.com/content/dam/kpm ... 31126e.pdf

[TokyoWart]

Whoops, yes I did make a mistake. But isn't the amount 100 million?

I've been going off of this article here https://www.tytoncapital.com/projects/j ... shore-tax/ which is old so maybe it changed. Either way we do have more than the threshold.

That article is kind of confusing. Here is KPMG's version: https://assets.kpmg.com/content/dam/kpm ... 31126e.pdf

So I think the confusion might be coming from this statement in the link from FaiyaaJapan:

Not new, but ongoing is the Assets and Liabilities Reporting form (Zaisan Saimu Chosho) which has to be filed by those with gross annual income in excess of 20 million JPY. Those who qualify for (/are caught under) OAR, do not have to declare the same assets twice, and instead will outline overseas assets in their OAR reporting

The OAR form lists each major overseas asset and its value but on the Zaimu Saimu Chosho the total value of the overseas assets just appear as their cumulative value in the box that reads 国外財産調書に記載した国外財産の価額の合計額. You don't list each overseas asset but you do list the total value of overseas assets on the AAL. Just as an aside, the KPMG article from 2013 mentions listing each overseas "moveable asset" such as the value of furniture. That is just crazy and is neither realistic (no way I have any idea about the current value of the various articles of used furniture in our property overseas and the total value is less than the rounding error for our estimate of illiquid financial assets) nor what I have been instructed to do by my accountants.

[FaiyaaJapan]

Whoops, yes I did make a mistake. But isn't the amount 100 million?

I've been going off of this article here https://www.tytoncapital.com/projects/j ... shore-tax/ which is old so maybe it changed. Either way we do have more than the threshold.

That article is kind of confusing. Here is KPMG's version: https://assets.kpmg.com/content/dam/kpm ... 31126e.pdf

I browsed the KPMG version and it seems much clearer. Basically I'm a non-permanent resident (been in Japan 18 months) and so for now I don't have to file the OAR no matter the value my assets are overseas. Does that sound right?