RetireJapan

If you remit interest accumulated in an overseas savings account to Japan, how is it treated for tax purposes? Does it qualify for the 20.315% rate as investment income?

Max wrote: ↑Wed Mar 05, 2025 7:46 am If you remit interest accumulated in an overseas savings account to Japan, how is it treated for tax purposes? Does it qualify for the 20.315% rate as investment income?

Interest paid abroad on deposits and savings, etc. is taxed as Aggregate Income, so at your Marginal Income Tax and Reconstruction Tax Rate, and 10% Residents' Taxes.

https://www.nta.go.jp/english/taxes/ind ... 024/01.pdf

See Page 10

Thank you, that link was very helpful. Sorry for my tardy acknowledgment.

So, what kind of investments do qualify for the 20.315 tax rate?

Mutual funds, stocks, margin trading etc.

Foreign savings accounts are not a great deal from a tax perspective, so unless the interest rate is high I don’t do much of it.

Thank you for this. In a nutshell, the 20.315 rate only applies to investments within Japan, correct? When I partially cashed in my overseas insurance policy I was hoping I could pay tax at this rate, but instead it was treated as miscellaneous income, and therefore taxed higher.

As a 65 year old Aussie about to retire in japan with my japanese wife, do I have to pay taxes on my Aussie pension, if I am not working.
Also do I need to declare my Aussie term bank deposit interest for tax in Japn?

The whole thing is quite confusing if I am also paying my taxes in Australia on interest earned etc.

Max wrote: ↑Thu Mar 13, 2025 11:05 am Thank you for this. In a nutshell, the 20.315 rate only applies to investments within Japan, correct?

That seems accurate enough to me, I am not aware of any exceptions to this. (It’s a bit unfair really, isn’t it)

nishi wrote: ↑Fri Mar 14, 2025 2:58 am As a 65 year old Aussie about to retire in japan with my japanese wife, do I have to pay taxes on my Aussie pension, if I am not working.
Also do I need to declare my Aussie term bank deposit interest for tax in Japn?

The whole thing is quite confusing if I am also paying my taxes in Australia on interest earned etc.

Not sure about the pension stuff, but as for the interest, you should become a non-resident in Australia (might need to make sure your bank knows that) after moving to Japan, and thus pay tax on interest at the non-resident withholding rate to Australia.

On the Japan side, if you do need to file a tax return then you will pay tax to Japan too on the interest earned, but be able to get a tax deduction based on the interest already paid in Australia.

It’s an annual hassle when I do this (not Australia) but since term deposits only pay few times per year it’s manageable once you know how to do it.

Oh yeah if you don’t bring the money to Japan for five years after becoming tax resident in Japan you may not need to pay tax to Japan over that period…

Max wrote: ↑Mon Mar 10, 2025 10:20 am Thank you, that link was very helpful. Sorry for my tardy acknowledgment.

So, what kind of investments do qualify for the 20.315 tax rate?

All the ones listed that say Separate Taxation Method

nishi wrote: ↑Fri Mar 14, 2025 2:58 am As a 65 year old Aussie about to retire in japan with my japanese wife, do I have to pay taxes on my Aussie pension, if I am not working.
Also do I need to declare my Aussie term bank deposit interest for tax in Japn?

The whole thing is quite confusing if I am also paying my taxes in Australia on interest earned etc.

Depends on how long you have been in Japan, and if less than 5 years, only if you remit funds to Japan.

You should read the Australia Japan Taxation Treaty.

https://www.mof.go.jp/tax_policy/summar ... lia_EN.pdf