RetireJapan

Hello,

Today I have a question about declaring tax in case of inward remittance from my home country to Japanese bank.
Just for the background, i often do small outward remittance from japanese bank to my home country every year. Now since the JPY is so weak, if i just do an inward remittance from my home country to my japanese bank, it seems to have good gain.

However this will not have a Tax witholding automatically, which means I will have to declare it in my year end tax adjustment. And since I am working in a company which does my year end taxes, i will have to input it in the form.

Now my question is, does anyone know how to input such outside gains in year end tax adjustment ? Is there manual for the same ? Or does someone have any better ideas for the same ?

Thanks in advance

tofusoba14 wrote: ↑Sun May 08, 2022 2:17 am ...
Just for the background, i often do small outward remittance from japanese bank to my home country every year. Now since the JPY is so weak, if i just do an inward remittance from my home country to my japanese bank, it seems to have good gain.

However this will not have a Tax witholding automatically, which means I will have to declare it in my year end tax adjustment. And since I am working in a company which does my year end taxes, i will have to input it in the form.

Now my question is, does anyone know how to input such outside gains in year end tax adjustment ? Is there manual for the same ? Or does someone have any better ideas for the same ?
...

It's called Kawase sasoeki 為替差損益 (Foreign currency gain/loss) and it is reportable as Zatsu shotoku (Miscellaneous income). However, if the net currency gain along with all of your other Zatsu shotoku is under 200,000 yen, you don't have to bother declaring any of the miscellaneous income provided you have Japanese employment income (which you do) and/or have Japanese pension income.

Realistically, you might open up a huge can of worms. The accounting for this is as if, say your other currency is US dollar, then all of your US dollar bank accounts combined with all of your dollar bills in your pockets is accounted for as if it is in a single investment fund. Each time you spend the money, buy other investments, or trade it another currency (even if it is not yen), you realize a gain or loss based on the average cost of your US dollar in yen terms for your "single investment fund".

A lot of Japanese Citizens interested in keeping foreign currency use foreign currency money market mutual fund instead and let that accounting be done automatically with tokutei koza at a Japanese brokerage firm instead of foreign currency bank account where you have to do the calculation manually and report it manually.

Technically, if you went to a trip to Taiwan where like Japan is highly cash based, the currency gain is theoretically required to be reported on the Japanese return as you buy food and take a train, go to tourist attractions, etc. assuming you already have 200,000 yen in miscellaneous income.

How many people are out of compliance with this anyway and how often will the auditor penalize people for it? I suppose the auditor's motivation will depend on how much money is involved so in most cases, they'll come after the huge currency traders and not just a casual tourist. Of course, they might catch you for something else and while they are at it, fine you for not reporting currency gain correctly.

Thank you for your detailed explanation !