Today’s lecture is “Reporting your overseas assets”

From Jan 2014, new rules were introduced for overseas assets. Japanese permanent resident who owns overseas assets valued at over JPY50 million as of Dec 31 must submit “Statement of Overseas Assets” by next year March 15th.

There are two key words for this rule:
1. Permanent resident
2. Overseas assets valued at over JPY50 million

Those who are living overseas

The tax payers are categorized into two types, resident and non-resident, and resident has two categories: permanent resident and non-permanent resident.

Resident: those who are living in Japan
1) Non-permanent resident Does not have Japanese nationality Lived in Japan for 5 years or less in the last 10 years 2) Permanent resident ★ Other than non-permanent resident

Only permanent resident is required to submit the Statement of Overseas Assets.

Location of assets are determined as follows:
Bank deposit – Address of financial institution
Stock/Bond – Address of financial institution
Real estate – Location of real estate

Value of assets is based on the market price. Market price for real estate may not be publicly available. In such a case, tax base for the real estate tax are used as market price of real estate.

TTB (Telegraphic Transfer Buying) as of Dec 31 is used as foreign exchange rate.
There are penalties for not filing Statutory of Overseas Assets. Additional penalty tax is levied if the tax is underreported or tax return was not filed.

Please remember that tax office is increasing level of oversight on the overseas income.

1. Japanese bank has obligation to report international money transfer to the tax office if the amount is 1 million yen or more

2. Tax authority can check your bank account without your permission

If you have not filed the Statement of Overseas Assets yet, please file it as soon as possible because the penalty will be exempted if you file the Statement of Overseas Assets voluntary.