Buying a car by financing it from overseas account by wire transfer

[solo7100]

They will ask, and you can reply. They would assume $38,000 (or more if you remit more) is completely tax free.
Depending on when in 2024 you remit the funds, they will assume part or all of the $10,000 of the total is from 2024 Pension Income, and taxable as Pension Income, but after deducting all Deductions and Allowances, so very low or zero tax rate...

Deductions
Personal Allowance - Y480,000
Dependent Spouse - Y380,000
NHI
Other Dependent relatives - Y380,000 per
Any qualifying Insurance Premiums
Perhaps other Deductions and Allowances

Net Taxable Income will be very low, so very low marginal tax rate.

Not sure how this quote things works for previous posts, but didn't want to quote the entire thing.

This makes sense, Tkydon. Thanks much. Had to read it a few times, but what I understand is if we pay for the car using monies obtained last year (which would be just savings), all is good if we explain and, with documentation, can show the NTA them evidence of this.

Thanks again,

[RetireJapan]

we pay for the car using monies obtained last year

There is no 'we' with money in Japan. It belongs to one person. This thread is a bit of a mess because you keep switching subjects. Please try to be more clear in the future.

[solo7100]

I see, sorry for that. The one person will buy it, we will drive it.

When I used we, I meant about actually driving the car. When talking about financing the car, it is the one person coming with the one person's money.

Again, apologies. Just trying to be clear.

Thanks again,

[SLW]

Yes, of course it’s possible. I’ve bought cars in Japan using an international wire as well as paid a contractor for a major home renovations in amounts well of 5 million yen. As long as the recipients account can accept international wires, it is a simple as sending any other international wire.

Did you ever get a call from the NTA? Bank? Any issues with tax questions when you wired that money over?

I don't see how any tax implications would happen since you are not sending money to yourself...you are sending money to the car dealer/person or directly to the contractor. You don't see a dime of it.

No. I have never heard a thing, but keep in mind I am a diplomat and have no tax liability in Japan under any circumstances - no residence card and no My Number. I have been posted here 3 times and each time and have done multiple wires of substantial sums to purchase cars, lease properties and pay for contractors on a property I have owned for over 2 decades. Never heard boo from the NTA and no questions from banks either.

[solo7100]

Hello SLW,

Thank you for that info. My confusion initially with the different stories, experiences, and vocabulary stemmed from different people’s different context. Now I see that your situation of course lends itself to the ease with which you were able to do the purchase.

Earlier, I used we and I interchangeably thus creating confusion. Knowing your situation about being a diplomat gives greater clarity of that experience. And what a sweet experience it is in your case, awesome!

Well, not a diplomat here so back to the drawing board. I’m actually at a dealer right now and asked them the same question I’ve asked here. They said the family member who is the money person here needs to wire the money to their bank here in Japan, then pay for it. That’s what I originally thought.

Next: tax ramifications. Thanks to all who responded thus far.

[Tkydon]

No. I have never heard a thing, but keep in mind I am a diplomat and have no tax liability in Japan under any circumstances - no residence card and no My Number. I have been posted here 3 times and each time and have done multiple wires of substantial sums to purchase cars, lease properties and pay for contractors on a property I have owned for over 2 decades. Never heard boo from the NTA and no questions from banks either.

So, totally irrelevant for this or any other discussion for any normal person...

How would anyone know that you are a diplomat in the first place ???
Can't keep in mind something you never knew in the first place...

[SLW]

No. I have never heard a thing, but keep in mind I am a diplomat and have no tax liability in Japan under any circumstances - no residence card and no My Number. I have been posted here 3 times and each time and have done multiple wires of substantial sums to purchase cars, lease properties and pay for contractors on a property I have owned for over 2 decades. Never heard boo from the NTA and no questions from banks either.

So, totally irrelevant for this or any other discussion for any normal person...

How would anyone know that you are a diplomat in the first place ???
Can't keep in mind something you never knew in the first place...

Well, I would consider myself a normal person. Since foreigner residents include SOFA, diplomats and official visa holders, there would be well over 100,000 people in Japan with the same situation. So I don’t agree that it is not normal or even particularly unusual. The OP simply asked a question if one could do such a transaction which I took to mean whether a car dealer would sell you a car and take payment via international wire. The answer is yes. And even if one was a Japan tax resident, if you had savings which happened to be sitting in a foreign bank account earned prior to becoming a Japan tax resident, they could still do such a transaction without any significant problems.

[solo7100]

" And even if one was a Japan tax resident, if you had savings which happened to be sitting in a foreign bank account earned prior to becoming a Japan tax resident, they could still do such a transaction without any significant problems."

And that was the origin of my question.

The person with the money who would be purchasing the car has just arrived in Japan like 2 weeks ago. They want to buy a car using savings that are in their US account (savings accumulated as stated earlier). So it is possible for sure (now I see), but just have to consider the tax ramifications.

Still don't get how the NTA would question the person living here who buys the car. If it is wired, the money would never hit the person's bank account...it would be the car dealer who gets the money. I would think the NTA would question the car dealer. As in, "Hey...we just saw 5mil yen hit your account. What's that about?"

Does the dealer pay the tax, do they report that this person has paid them with their US money, or...?

Will be on the lookout for the answers to these questions. Thanks for all your help thus far.

[RetireJapan]

the money would never hit the person's bank account...it would be the car dealer who gets the money. I would think the NTA would question the car dealer. As in, "Hey...we just saw 5mil yen hit your account. What's that about?"

I don't understand why you want to wire the money to the dealer. Why not have the person send them money to their own Japanese bank account, then pay the dealer normally?

[solo7100]

the money would never hit the person's bank account...it would be the car dealer who gets the money. I would think the NTA would question the car dealer. As in, "Hey...we just saw 5mil yen hit your account. What's that about?"

I don't understand why you want to wire the money to the dealer. Why not have the person send them money to their own Japanese bank account, then pay the dealer normally?

That was the original thought for months - that when they (the person with the money who will buy the car) get here, they will set up a Japanese bank account, get their US bank and Japanese bank ready for large transfer, send money to Japanese bank, finally buy car. However, that process would take quite some time and with all the tax implications we were being very cautious with this journey.

The main thing was the need for a car immediately. As in, now.

Then, my American friend was like, "What? What are you waiting for? For our car we just wired the money from our US bank to the dealer and got our car."

"What?" -me

Hence, that is why I posted the question here. I don't believe things outright until doing research as best I can.

(If we have to wait and do the original plan, we'll just have to wait. This question was a stop gap to see options.)