eBay, PayPal and Taxes

[expat2011]

Hey there Retire Japan. I am thinking about selling some stuff on eBay (even with the current mail delays). Right now my account is a US account, and actually you can't change countries with PayPal. I found this out when I tried to update my address. You need to close your account entirely and make a new account :-/ So I am thinking to close my US account and make a new one because it's important that your account info be accurate, right?

Anyways, I am pretty sure that in the US, PayPal will file a statement with the IRS, so if you don't include your PayPal earnings in your US taxes you'll get a nasty letter in the mail. My question is, what about a PayPal account in Japan? Do they make any kind of report or year-end summary? I am not trying to avoid taxes, I am just trying to understand how to document and report these sales, if they even need to be reported. (Maybe there's a minimum or something.) I am not trying to start an eBay business but rather just get rid of some clutter.

Any advice would be appreciated.

[Beaglehound]

I believe you can earn up to 200k from incidental income like this without any need to report if you are a company employee and your tax return is taken care of by them. If self employed or your income comes from more than one source I think it needs to be declared. I am hedging because I am relying on the document linked below and in places you can read the same sentence ten times over while being none the wiser. Section 1-5 on page 11 ‘explains’ the rules:

https://www.nta.go.jp/english/taxes/ind ... 019/00.pdf

I suppose you might in theory be able to deduct whatever you paid for what you are selling. In that case you are unlikely to have any tax liability at all since you haven’t actually made any money. Others may know better than I as it isn’t something I have done here.

[Dabitto]

I suppose you might in theory be able to deduct whatever you paid for what you are selling. In that case you are unlikely to have any tax liability at all since you haven’t actually made any money. Others may know better than I as it isn’t something I have done here.

I can confirm this after having read this article from a Japanese accountant.

https://meetsmore.com/services/tax-retu ... edia/48287

He states that: "the 200,000 yen limit only applies to the actual profit you have made. The "profit" is the total selling price minus total costs (these costs include the buying price, wrapping price, sending fees etc.). Thus, the average person selling his second hand stuff does not need to file any taxes on his flee market sales. You are only obligated to file for taxes if you made actual profit on the sales and if this profit number his higher than 200.000 yen."

However, there seem to be two exemptions to this rule:
1. If you are reselling precious metals or pieces of art with an individual selling price in excess of 300.000 yen (even if you do not make any actual profit).
2. If you are reselling "a lot" of identical items. "A lot" seems to be unspecified, but the accountant takes an example of 100 as an amount (again even if you do not make any actual profit).

Hope to have helped you out!

[expat2011]

Thanks very much to both of you for your responses, and apologies for my late reply. This is really helpful! It sounds like I won't need to declare anything because I'm just selling junk and I'm positive I won't make more than 200,000 yen (I'd be surprised to make 1 mon!), but I will also keep track of everything just in case. Thank you again!