RetireJapan

So, how exactly do these taxes work?

You pay capital gains tax of just over 20%, and then pay income tax on the net profit? Or not?

My understanding (and experience) is this:

Capital gains tax is paid on the increase in value (capital gain) of your asset. So it becomes payable when you sell something for a profit. If you sell something for a loss, you can use that to offset something you sold for a profit. This is the principle tax-loss harvisting is based on.

Income tax is paid on dividends, because they are a source of income, the underlying asset value doesn't change.

So summary: income tax on dividends, capital gains on profits from a sale.

This has implications for the NISA, but maybe that's getting into too much detail?

Thanks adamu

Someone posted a while back that you should pay income tax on capital gains over 200,000 yen a year (the threshold for declaring supplementary income to the tax office). Does anyone know if this is true or not? I haven't really sold much so far, so can't speak from experience

RetireJapan wrote: ↑Tue Aug 08, 2017 6:58 am Thanks adamu

Someone posted a while back that you should pay income tax on capital gains over 200,000 yen a year (the threshold for declaring supplementary income to the tax office). Does anyone know if this is true or not? I haven't really sold much so far, so can't speak from experience

Yes it seems true! I've wrote that down when I was doing research in Japanese on capital gains. No need to declare them if inferior to 200 000 it seems.

To follow up on what Adamu mentioned, how are dividends treated in NISA?

Dividends from stocks and funds held within a NISA account are not taxed.

Now, whether you are expected to declare them to the tax office if they are over the 200,000 yen a year limit for not reporting additional income, I'm not sure.

When I went into the tax office I showed them the statement from Rakuten and they weren't interested.

Thought as much. Doubt they'll be very interested in my ¥1,200 or so of dividends anyway!

I just talked to my wife's accountant, and he told me as long as the assets are in a 特定口座 (tax reporting account) then all the taxes are done for you and you don't owe anything extra, regardless of the amount of dividend or capital gains received.

Now, if you want to get fancy and write off losses, etc. you have to report everything to the tax office and may owe extra tax, but if you don't you are all good.

Great news from my perspective. It means our tax rate in retirement is going to be low-ish and predictable

SBI told me they sort of do the tax loss harvesting for you. At the end of the year they do a final total of your capital gains minus your tax losses and will issue you a refund if you're in the negative for that year, or if you had sales for losses. Sorry, I just woke up so maybe I'm not explaining well.
If you sell some funds for minus 10,000¥, at the end of the year you'll get a refund for paid capital gains taxes on other stuff up to 10,000¥. If you have multiple accounts, like at SBI and Rakuten, or if you want to carry it forward a year or two (I forget the max) or if you want to get fancy balancing that loss against other parts of your tax filing then you should stop the tokutei kouza and do it yourself. The SBI rep told me to def use a tax accountant because the Japanese IRS will look more closely at your filing.

Akatani wrote: ↑Fri Aug 25, 2017 7:08 am SBI told me they sort of do the tax loss harvesting for you.

Yeah, that's it. But using the losses over several years requires filing. I'm happy to leave it all to them!

Just glad I don't have to declare (I think my dividends will go over 200,000 this year -what I thought was the limit to trigger a declaration