RetireJapan

Thanks for the replies.

kaigo hoken is a new term for me so I will check into that.

Hah thank you for the reminder to move past skimping and saving it is going to be a tough habit to break I haven't really adjusted budget numbers yet just trying to get a rough idea of required payments. There will be enough left over for fun I'm sure

Post by Tokyo » Mon May 17, 2021 9:09 am
@futureplanner

As to share-based income, my Japanese accountant assures me that no declarations are needed since tax is automatically deducted at the source. Good news!

This is true only if your shares are in Japanese corporations, and held with Japanese brokers.
See Pages 56-57 of the 2020 Tax Guide here:
https://www.nta.go.jp/english/taxes/ind ... /index.htm

If you hold International Equities through overseas brokers, they may or may not be subject to Withholding.

Whether you are a US citizen or not, Dividends on US Stocks are subject to US Withholding Tax at 30%, unless you claim the reduced rate of withholding of 10% under the US Japan Tax Treaty.

You can then claim the amount of Tax paid in the US as a Foreign Tax Credit on your Japanese Tax return. See Page 47.
Dividends are taxed at 15% National Tax, 0.315% Reconstruction Tax, and 5% Resident's Tax.
If you paid tax in US, then you can claim that as a Credit, off-setting the Japanese Tax.

If you are not a US Citizen, Capital Gains are not taxed in the US, but you would have to report the gains here, and pay the appropriate tax.

If you are a US Citizen, Capital Gains are taxed in the US. You would have to report the gains gross here, and pay the appropriate tax, but can claim the Foreign Tax Credit for Tax paid in the US. See Page 47.

In the Tax Return all categories of income contribute to the final Total Income number (See Page 10); Employment Income, Dividend Income, Interest Income, Real Estate Income, Business Income, Miscellaneous Income which includes Pensions, Royalties, Paid Engagements and Annuities, etc., Capital Gains, Occasional Income and Retirement Income...
It is not necessary to file if tax is withheld at source, but not all sources are subject to withholding, so those would require a filing.

@Tkydon
Thanks for clarifying but all my ETFs are with Nomura, and I am not American either. Cheers!

@Tkydon

Thank you for the link to that tax guide that will be good reading. I am a US citizen so expect to have some extra tax paperwork each year. This helps give some direction on what that is going to look like!

I am by no means an expert but for Japanese tax obligations (not talking about other countries here) you only need to file a tax return if you have income of any kind where (a) the Japanese taxes were not withheld at source or (b) are exempt. So once you are retired if all of your assets are in NISA, IDECO/J401K and Tokutei accounts you should not need to file a tax return for any dividends, interest or capital gains as the money will either be exempt (NISA) or the broker will withhold the amounts before transferring the cash to your account.

If you have any income of any kind not subject to withholding and not exempted then you will need to file a tax return yearly even after retirement.

At least this is my understanding so if I am wrong about this please point it out for me (so I don't go to tax jail in the future as an elderly gaijin )

(so I don't go to tax jail in the future as an elderly gaijin )

On the other hand, this might solve that problem of getting free housing in one's twilight years ...