RetireJapan

I have a question regarding the requirement for tax residents in Japan to declare overseas assets of more than 50 million yen.

When I moved to Japan about three years ago, my employer gave me a bunch of forms to complete. One of the forms included the question about overseas assets. I declared zero overseas assets.

As of today, I have overseas assets that exceed the 50 million yen threshold. I would like to straighten this out with the relevant authorities, as I've heard that there are penalties for failing to declare overseas assets.

Does anyone have experience with this? What do I need to do to update my declaration? And do I need to worry about penalties for failing to do so sooner?

When did these assets go over 50M yen? According to the NTA, you are only required to report overseas assets over 50M the year after the assets were acquired/went above 50M.

https://www.nta.go.jp/taxes/shiraberu/t ... i/7456.htm

I'm trying to understand WHY this is required and what's the penalty but it seems like doing it (or not) affects the penalty for misreporting overseas asset income and/or inheritance. If you do submit this, you get 5% less penalty (if you are assessed penalties) and then 5% more penalty otherwise. Seems quite odd but I'm not a tax expert.

Correct.

In addition, if you do not submit the report there is a penalty amounting to up to a year in prison or a fine up to JPY 500,000. But I guess you do not have to worry about this if you submit it this year on your own initiative. Better check with a tax accountant though.

FWIW, here’s my experience.

After 5 years in Japan/permanent residency, you’re supposed to declare worldwide income, including interest on bank deposits. I had long ignored this issue (probably not the only gaijin or Japanese to do so…). Then came the requirement to declare overseas assets if >50 million.

Worried by the increasing automatic exchange of data among countries, about 10 years ago I came clean with my Japanese accountant, who was totally unfazed and duly started declaring my overseas assets & income from the next kakutei shinkoku.

Coincidentally, a foreign friend did exactly the same at the same time, different accountant, and an order of magnitude higher amounts. Neither of us received any penalties. We file, pay our taxes, and sleep well.

I would recommend using an accountant, but as you’re employed, you should probably ask your accounting department for those forms on which to declare overseas assets & income. If not this year (too rushed now by March 15?), then next year.

Japanese laws usually cite fines and/or imprisonment, but the tax office definitely is not going to lock you up - they just want your money!

Hana

I have to submit this report for the first time this year. I thought that the submission date was June (it will be from next year) but realized that it was still 15th of March this year. So, I need to rush.

Could you give me the contact of your accountant? I once consulted a tax accountant about tax inheritance. He asked me 700,000 JPY to fill in my tax report. Thank god just before wiring the money I discovered that I did not even have to fill out a report considering the amount involved. So, I am now very careful about picking an accountant on the net without a recommendation.

700,000 for a personal tax return 確定申告 is totally unreasonable. That's about what you might expect to pay for a small sole-proprietor company's tax return + its owner's 確定申告.

Unfortunately I can't give you the name of my accountant as he is retiring this year and I don't yet have experience with another. I'd suggest searching this board, or asking this board for recommendations, or better, asking those around you.

Sorry I can't be of more help, but good luck.

hana wrote: ↑Mon Mar 06, 2023 3:10 am 700,000 for a personal tax return 確定申告 is totally unreasonable. That's about what you might expect to pay for a small sole-proprietor company's tax return + its owner's 確定申告.

My wife runs a small company (15 employees total) and pays nowhere near that for company and personal filing.

Reminds me of when one of our kids dropped a toy down the toilet, blocking it. The first company we got out insisted that we needed to replace the toilet (300,000 yen or so). The second company we got out brought a big truck vacuum cleaner thing, and sorted it out for 7,000 yen.

If I understand correctly, that 700K yen was for an inheritance tax filing:

> consulted a tax accountant about tax inheritance. He asked me 700,000 JPY to fill in my tax report

I think it is perverse, but this does seem to be the going rate for such matters, since the specialized knowledge of inheritance tax can make it worth that…

Yes, inheritance not income tax filing. For the income tax filing, I just ask the tax office to fill it out for me and they gracefully do it every year. It does not cost me 1 JPY. But cross-border inheritance is complex and 700,000 is probably fair. But in my case, the thing is that I did not have to fill a report to start with as the amount was below 84,000,000 JPY (60 mio plus 6 mio per sibling deduction). Every tax accountant should have this basic knowledge this is why mine was either extremely incompetent or very dishonest.
Thinking about is as may ask the tax to fill in the foreign assets report as well!

hana wrote: ↑Mon Mar 06, 2023 3:10 am 700,000 for a personal tax return 確定申告 is totally unreasonable. That's about what you might expect to pay for a small sole-proprietor company's tax return + its owner's 確定申告.

Unfortunately I can't give you the name of my accountant as he is retiring this year and I don't yet have experience with another. I'd suggest searching this board, or asking this board for recommendations, or better, asking those around you.

Sorry I can't be of more help, but good luck.

Thanks Hana