Japanese tax office sees all international remittances over 100,000 yen or so. This was the case even before My Number came in (so it's much easier for them now).AustinJapan wrote: ↑Thu Feb 21, 2019 3:56 am I asked Go Remit yesterday whether giving my My Number to them means complete access to all transactions to JTO, to anyone. Dude had no idea.
Australians, let’s chip in for a willing and competent Tax Lawyer w
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RetireJapan
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Re: Australians, let’s chip in for a willing and competent Tax Lawyer w
English teacher and writer. RetireJapan founder. Avid reader.
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AustinJapan
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Re: Australians, let’s chip in for a willing and competent Tax Lawyer w
Doofus,
1) Say if you have a property in Aust and you are losing money in it, can you write that off against your Japanese income? I.e you declare your Australian mortgage and it’s monthly payments, the associated costs, and the rental income in Japan on your Japanese tax return?
2) If you do (1j as above, does the tax agreement allow you to skip making two declarations, one in each country i.e. no need to lodge in Australia? You mention that the more expensive tax always applies. But how so andbin such a scenario, which tax regime applies? Aussies owning Aussie property but residing outside Australia must pay 33 cents from the first dollar of rental according to the Aussie side of things, ( which frankly makes the whole exercise a waste on pure fiscal terms unless losses on the property offset it. ) However, if you declaring and residing in Japan, surely the Japanese tax regime applies? Whatever that is?
3) If you don’t mind, how did you find out how to declare your Aussie stuff in Japan and how does the ATO know not to chase you up on account of you declaring in Japan.
1) Say if you have a property in Aust and you are losing money in it, can you write that off against your Japanese income? I.e you declare your Australian mortgage and it’s monthly payments, the associated costs, and the rental income in Japan on your Japanese tax return?
2) If you do (1j as above, does the tax agreement allow you to skip making two declarations, one in each country i.e. no need to lodge in Australia? You mention that the more expensive tax always applies. But how so andbin such a scenario, which tax regime applies? Aussies owning Aussie property but residing outside Australia must pay 33 cents from the first dollar of rental according to the Aussie side of things, ( which frankly makes the whole exercise a waste on pure fiscal terms unless losses on the property offset it. ) However, if you declaring and residing in Japan, surely the Japanese tax regime applies? Whatever that is?
3) If you don’t mind, how did you find out how to declare your Aussie stuff in Japan and how does the ATO know not to chase you up on account of you declaring in Japan.
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AustinJapan
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Re: Australians, let’s chip in for a willing and competent Tax Lawyer w
[quote=doofus post_id=3847 time=1550728539 user_id=780..
...you should declare Australian source investment income in your Japanese tax return.
...I do.
.. If you just ignore it, you'll get caught out sooner or later.
.....if you're going to get advice, do it before you become a permanent tax resident of Japan.
[/quote]
I think we are beginning to know the basics of what we should do...doing it is the question, how?
Some of us were misinformed, naive whatever....
I know nobody who has been here over ten years doing as you suggested. They simply didn’t know how to even if they wished too.
So the question is, what if you are here with assets at home but have always lodged separately. I mean, if you have lost money in Aust you owe no taxes but what are the ramifications for suddenly declaring a house at the JTO out of the blue?
You say you’ll get caught but under what mechanism? If tax accountants don’t understand how to lodge forms, how are we expected too?
...you should declare Australian source investment income in your Japanese tax return.
...I do.
.. If you just ignore it, you'll get caught out sooner or later.
.....if you're going to get advice, do it before you become a permanent tax resident of Japan.
[/quote]
I think we are beginning to know the basics of what we should do...doing it is the question, how?
Some of us were misinformed, naive whatever....
I know nobody who has been here over ten years doing as you suggested. They simply didn’t know how to even if they wished too.
So the question is, what if you are here with assets at home but have always lodged separately. I mean, if you have lost money in Aust you owe no taxes but what are the ramifications for suddenly declaring a house at the JTO out of the blue?
You say you’ll get caught but under what mechanism? If tax accountants don’t understand how to lodge forms, how are we expected too?
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AustinJapan
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Re: Australians, let’s chip in for a willing and competent Tax Lawyer w
[quote=doofus post_id=3847 time=1550728539 user_id=780..
...you should declare Australian source investment income in your Japanese tax return.
...I do.
.. If you just ignore it, you'll get caught out sooner or later.
.....if you're going to get advice, do it before you become a permanent tax resident of Japan.
[/quote]
I think we are beginning to know the basics of what we should do...doing it is the question, how?
Some of us were misinformed, naive whatever....
I know nobody who has been here declaring here, say, an inheritance in Oz....They simply wouldnt know how to even if they wished too.
On the other hand, I know nothing . I see nothing, ..I say nothing....so who knows about property in Aust, or Thailand etc.,?
I always declare everything of course.
Imagine someone who hadn’t?
What if they had assets at home but have always lodged separately. I mean, if you have lost money in Aust you owe no taxes but what are the ramifications for suddenly declaring a house at the JTO out of the blue?
You say you’ll get caught but under what mechanism? If tax accountants don’t understand how to lodge forms, how are we expected too?
A tax lawyer might be useful. Whoever, whatever and wherever such a entity might be???
...you should declare Australian source investment income in your Japanese tax return.
...I do.
.. If you just ignore it, you'll get caught out sooner or later.
.....if you're going to get advice, do it before you become a permanent tax resident of Japan.
[/quote]
I think we are beginning to know the basics of what we should do...doing it is the question, how?
Some of us were misinformed, naive whatever....
I know nobody who has been here declaring here, say, an inheritance in Oz....They simply wouldnt know how to even if they wished too.
On the other hand, I know nothing . I see nothing, ..I say nothing....so who knows about property in Aust, or Thailand etc.,?
I always declare everything of course.
Imagine someone who hadn’t?
What if they had assets at home but have always lodged separately. I mean, if you have lost money in Aust you owe no taxes but what are the ramifications for suddenly declaring a house at the JTO out of the blue?
You say you’ll get caught but under what mechanism? If tax accountants don’t understand how to lodge forms, how are we expected too?
A tax lawyer might be useful. Whoever, whatever and wherever such a entity might be???
Re: Australians, let’s chip in for a willing and competent Tax Lawyer w
Give me a little time and I'll try to answer some of your questions.
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AustinJapan
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Re: Australians, let’s chip in for a willing and competent Tax Lawyer w
Sure, thanks.
Sorry about double posting some bits and pieces back there. WiFi was dropping in and out I’m afraid.
Sorry about double posting some bits and pieces back there. WiFi was dropping in and out I’m afraid.
Re: Australians, let’s chip in for a willing and competent Tax Lawyer w
Aust I am in the same boat as you (can't find anyone with any idea.) It is impossible to make decisions (such as making voluntary contributions to super, buying stocks such as lic's with fully franked returns etc..)without knowing this information and the correct tax implications. It would be a huge gamble to invest (if you knew the Japanese government were going to slug you with another tax. All these things will have a huge impact on if or not I stay in Japan long term (which is highly unlikely considering.)
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AustinJapan
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Re: Australians, let’s chip in for a willing and competent Tax Lawyer w
Thanks Thurston.
Appreciate your honestly.
Obviously a lot of bluff about - for good reason - I am not trying be a maverick nor dim enough not to accept the basic conceit necessary for information sharing on a site like this given our -as in all of our - situations.
Anyway we can slowly push the knowledge base forward is great. Right now, my guess is that people right now are in hunter-gather-hide mode, in respect to knowledge gleaning md managing the risks, either as individuals or with their best mates/family kind of thing.
Appreciate your honestly.
Obviously a lot of bluff about - for good reason - I am not trying be a maverick nor dim enough not to accept the basic conceit necessary for information sharing on a site like this given our -as in all of our - situations.
Anyway we can slowly push the knowledge base forward is great. Right now, my guess is that people right now are in hunter-gather-hide mode, in respect to knowledge gleaning md managing the risks, either as individuals or with their best mates/family kind of thing.
Re: Australians, let’s chip in for a willing and competent Tax Lawyer w
AustinJapan, I think the important thing is to make a genuine attempt do get things right going forward—and to judge from you're questions, it sounds like you are. Tax authorities are more sympathetic towards people who are trying to do the right thing. When we first moved to Japan, we were renting out our house in Australia. We went to our local tax office in Japan and asked them about whether we had to lodge a tax return for the rental income etc. They were quite helpful.
It depends on your type of income, but you probably need to lodge tax returns in both Australia and Japan.
If you're not an Australian resident for tax purposes (which it sounds like you're not), your Australian tax return will only include your Australian source income, such as your rental income. It doesn't need to include fully franked dividends, or interest/unfranked dividends if withholding tax has been deducted at the time they were paid.
If you're a permanent tax resident of Japan (i.e. you've been here more than 5 years), you generally need to include your Australian source income in your Japanese tax return too. The way the tax treaty works is that your can claim a tax credit for any tax you've already paid in Australia (and vice versa). So, for examine, if you have $10,000 of assessable income in Australia and pay $3,250 tax to the ATO, you can reduce your Japanese tax bill by up to $3,250. One catch is that they will only let you use the Australian tax credits to reduce the tax payable for the income you earned from foreign sources—not the income your earned in Japan. Claiming tax credits can get a bit confusing because Australia's financial year ends on 30 June and Japan's end on 31 December.
In your case, if you're making a loss on the investment property in Australia (i.e. expenses are higher than rental income), I cannot see how the Japan tax office is going to care that you haven't declared it. If anything, you might have been able to use the loss to reduce your Japanese tax bill. (I've never really had a look at how negative gearing works in Japan, but I think it might be possible, in theory at least).
You also asked about how Japan tax authorities might find out if you haven't declared your Australian income. The new OECD Common Reporting Standards will mean more financial information is going to be shared between tax authorities. Australia and Japan begin reporting in 2018, although I don't know what sort of information they report. International money transfers are another way they might pick up that you've got assets or a source of income overseas. And if you're got foreign assets worth more than 5,000万円, you're also supposed to lodge a separate report detailing all your assets and their values.
It depends on your type of income, but you probably need to lodge tax returns in both Australia and Japan.
If you're not an Australian resident for tax purposes (which it sounds like you're not), your Australian tax return will only include your Australian source income, such as your rental income. It doesn't need to include fully franked dividends, or interest/unfranked dividends if withholding tax has been deducted at the time they were paid.
If you're a permanent tax resident of Japan (i.e. you've been here more than 5 years), you generally need to include your Australian source income in your Japanese tax return too. The way the tax treaty works is that your can claim a tax credit for any tax you've already paid in Australia (and vice versa). So, for examine, if you have $10,000 of assessable income in Australia and pay $3,250 tax to the ATO, you can reduce your Japanese tax bill by up to $3,250. One catch is that they will only let you use the Australian tax credits to reduce the tax payable for the income you earned from foreign sources—not the income your earned in Japan. Claiming tax credits can get a bit confusing because Australia's financial year ends on 30 June and Japan's end on 31 December.
In your case, if you're making a loss on the investment property in Australia (i.e. expenses are higher than rental income), I cannot see how the Japan tax office is going to care that you haven't declared it. If anything, you might have been able to use the loss to reduce your Japanese tax bill. (I've never really had a look at how negative gearing works in Japan, but I think it might be possible, in theory at least).
You also asked about how Japan tax authorities might find out if you haven't declared your Australian income. The new OECD Common Reporting Standards will mean more financial information is going to be shared between tax authorities. Australia and Japan begin reporting in 2018, although I don't know what sort of information they report. International money transfers are another way they might pick up that you've got assets or a source of income overseas. And if you're got foreign assets worth more than 5,000万円, you're also supposed to lodge a separate report detailing all your assets and their values.
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AustinJapan
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Re: Australians, let’s chip in for a willing and competent Tax Lawyer w
Doofus,
Thank you.
Very helpful.
Here begs the question, or warning, 'Be careful what you wish for" again. Asking if you can use losses in Australia - and of course they not tax credits - just interest paid on mortage, might trigger a whole new can of worms.
Very interesting that you actually asked the tax office here about the property, and by the way you use 'we', it suggests that you might be married, and that could change your taxation regime too.
Business year ending June 30 means one would have to create their own table or chart and possibly translate all your losses into Japanese. Depreciation, new roofing, gutters etc., I cannot imagine how tiring and messy that would get.
To summarise.
1) You must lodge here AND in Japan
2) If you pay tax in Australia those credits can be used against the Aussie portion of the income you must declare here.
3) You must account somehow for the Aussie business year being July to June and all statements in Austr being available only in May etc.
4) Currency variations probably just say...sod it..let them figure it out
It seems that you have to get the Aussie part sorted first, and then factor that into the Japan part, which is kinda nutsgiven the Aussie part isn't Jan to Dec, but anyway. it is a start. Thank you!!!
PS A notable take-away here....the Aussie regime rules the Aussie part of your folio..i.e. you will be treated as a Foreigner for Purposes of Taxation, even with eth agreement and dual lodgement, thus still copping the brutal tax rate.
Thank you.
Very helpful.
Here begs the question, or warning, 'Be careful what you wish for" again. Asking if you can use losses in Australia - and of course they not tax credits - just interest paid on mortage, might trigger a whole new can of worms.
Very interesting that you actually asked the tax office here about the property, and by the way you use 'we', it suggests that you might be married, and that could change your taxation regime too.
Business year ending June 30 means one would have to create their own table or chart and possibly translate all your losses into Japanese. Depreciation, new roofing, gutters etc., I cannot imagine how tiring and messy that would get.
To summarise.
1) You must lodge here AND in Japan
2) If you pay tax in Australia those credits can be used against the Aussie portion of the income you must declare here.
3) You must account somehow for the Aussie business year being July to June and all statements in Austr being available only in May etc.
4) Currency variations probably just say...sod it..let them figure it out
It seems that you have to get the Aussie part sorted first, and then factor that into the Japan part, which is kinda nutsgiven the Aussie part isn't Jan to Dec, but anyway. it is a start. Thank you!!!
PS A notable take-away here....the Aussie regime rules the Aussie part of your folio..i.e. you will be treated as a Foreigner for Purposes of Taxation, even with eth agreement and dual lodgement, thus still copping the brutal tax rate.