French "Assurance Vie" and Japanese tax

[eagleyes]

Hello,

Apologies in advance for a national specific post but it is a bit unique and if there are french nationals on this Forum I would appreciate some insights.
Of course if anyone has a view due to similarities with other countries much appreciated!

Here is the problem statement: I have back home a so called "Assurance Vie" product in place before I came to Japan. Be careful with the litteral translation, it is not just a life insurance. It is a very popular hybrid investment product which allows you to invest over the long term and provides a preferential rate of tax on gains withdrawn post a certain number of years threshold. You can hold within that envelop many types of investments. Every year it generates interests or/and dividends but those are not taxed in France. Only taxed when you withdraw money later on. It can be used to have an additional pension but not mandatory.

So now, how is it taxed in Japan is the question? Are the interests generated every year and hence to be declared every year to the Japan tax office? or is it taxed only at the time of withdrawal (similar to France)? I am talking from the perspective of someone who is fiscal permanent resident in Japan. It looks to me it can be only taxed once by the same country. It cannot be twice (every year and at time of withdrawal) although apparently in the US it is taxed twice!

As per french-japan convention you can get a tax credit of the portion paid in France to the Japanese tax but if the timing of taxation is different it just does not make sense.

Any thoughts? Has anyone already checked?

[Tkydon]

The interest generated every year within the "Assurance Vie" product wrapper are tax free.
It is only taxed at the time of withdrawal (similar to France).

I think the way this product works in France is you can take a portion of the value as a One-Time Lump Sum in Retirement, and the rest is used to purchase an Annuity that then pays a Pension.

Under the France Japan Tax Treaty

https://www.impots.gouv.fr/sites/defaul ... l.pdf?l=fr

https://orbitax.com/taxhub/taxtreaties/ ... /FR/France

Article 18 states that Pension Benefits are only taxable in the Country of Residence, so if you are resident in Japan in retirement the Pension income will only be taxable in Japan, so no double taxation.