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[stumptowny]

According to the wording of the legislation that will soon become law, (barring some kind of last-minute miracle), all who are considered by authorities to be permanent residents (and who own global financial assets exceeding a total of 100 million yen (around $850,000) will be mandated to pay this new exit tax. It applies only to those who wish to leave the Land of the Rising Sun to move abroad.

So.....

Some things to consider:

Never let them know of your "worldwide assets" if you can help it.

- as discussed previously, no money transfers into or out of Japan that approach 10,000USD. This is believed to be the threshold at which you will be investigated "flagged" for audit/further inquiry. Avoid multiple smaller transfers as well. One idea mentioned before, fly out cash on your person and deposit it into your account if your banking institution is at your holiday destination or you are returning home for a visit.

- Always pay your taxes in japan and your home country. The taxes that are actually legit! if you do this (and avoid the money transfer issue), your assets will not be found. NTA has to give good reason to the IRS for them to share your tax records. the IRS is not going to send every American's 1040 to the NTA each year as default practice. They are too strapped for that.

- Warning: If you get a seemingly benign inquiry from your local tax office for more information just to "double check" their tax records, you may have been flagged for an audit and further sniffing into your "worldwide assets" ignore, delay, do what you can. Frankly, I would never go there until you need a copy of your tax records for a visa renewal, at which point you should have left Japan already. But Maybe they would get you then, when you get your tax summary's for the visa renewal?? Maybe not?? If you decided to stay and risk it, and they do question the inquiry sent to you previously at that point, do the japanese way >> just say "I don't know" and leave with your tax papers. no saying what they will do.

- If they do get you, and find your worldwide assets, tell them you have already paid taxes on these assets in your home country and that if they can prove you can be double taxed AND that you agree to being double taxed, then ok. This is just to buy time so you can leave. obviously, you are being double taxed and they are brazen enough to tell you to your face. they don't care, hence the passing of these laws.

- avoid setting up permanent roots in Japan. My condolences if you are wealthy, stuck, and being shook out for monies that have absolutely nothing to do with Japan. you are toast if you stay or leave japan forever. before, they just had the stay part spoken for. now they have the leave part too.

- readying to leave japan forever: if you still need to, DO make large money transfers out of japan just before you leave. though this may flag you, who cares, they won't have time to investigate. the bank gets a cut so they don't mind the large transfer size. but they will report it to the NTA for its transfer size. you will already be gone by then.

Additionally, if you have even more cash, or your bank in japan limits your transfer size, you can use 7/11 or other services to move money out.

- Finally, pulling the eject button on japan without suspicion when you do leave.

Here is you, May 22 at the airport, leaving for holidays....

Immigration: "How long will you be gone/leaving for?"

Rich person: "Ten days, you can see on my return ticket."

(June 2nd return date)

Immigration: "....... uh, have a nice trip"

Rich person: "Thanks! See you with my new tan in 10 days.. sucker!!"

buy a round trip ticket when you pull the ejection seat on japan!!!

You may consider leaving without warning elsewhere in your life too. pay your bills and be square that way but you can just leave your apartment. owner gets the deposit anyway and all the free stuff...

Regarding enforcement, I've not heard anything. if they don't know your plans, no enforcement anyhow. Even if they had been after you, trying to meet to "double check their tax records" and after your multiple large money transfers, I am not sure they could deny you a quick holiday at the airport. at that point, you've done nothing wrong.

hypothetical: maybe they'd send NTA to the airport quick, find your worldwide assets, confirm them with IRS, ask that you pay them, you say no, they garnish your wages, and they lock you out of your apartment...... all in the 30 minutes before your flight leaves. hmmmm.. don't think so.

Final thoughts: Japan can attempt to capture your foreign income / worldwide assets and double tax you (something the tax sharing agreements are supposed to be used for, to protect you, not TOO double tax you) but you do not have to give this information, if you can readily leave, and you certainly shouldn't make it easy by volunteering it.

Government secrecy laws to hide potentially dangerous information from the japanese public passed last year and now this gem.

Source: http://www.japantoday.com/category/opinions/view/dont-forget-to-tip-the-doorman-japans-new-exit-tax

[Shakey]

Good post, but your writing style in some sections confused me on what you were trying to say.

There was a Canadian guy, SuperGrover, I think his handle was, on GaijinPot.com a few years ago that was caught up in a Japanese Tax investigation.

If I had to guess, after reading his many and lengthy posts on the matter, he is probably a millionaire with stocks, cash and real estate investments overseas. He apparently was not paying taxes to the Japanese government on these foreign sources of income. He is an English professor at a university and he reports that other gaijin university professors in his area or that he knew were also investigated by the Japanese Tax Authority. It seemed like he was suggesting that they may specifically target people who are expected to have a higher income and who are likely doing a lot of overseas remittances every month or throughout the year.

It has been a couple of years since I read that thread and GaijinPot has shut down, but he was very bitter and angry, so my guess is that the Japanese government really gouged him for unpaid taxes on his foreign investment income.

Other English teachers on that GaijinPot thread said that they never send international remittances for more than 400,000 - 500,000 a month in order to stay under the radar.

Finally, I know teachers who hand carry about 900,000円 when they fly out of Japan a couple of times a year. Some have offshore accounts in Singapore or Hong Kong, and one does her banking in Taiwan. They deposit the hand carried cash into their hometown or personal bank accounts directly. They have been doing this for years. There is no record in Japan of them ever sending any international money transfers or remittances. They also save on exorbitant remittance fees that Japanese banks charge.

I think if you are comfortable with a hand-carry type of scenario, it is well worth it, especially in the long term and if you are someone who is actively saving and investing in overseas ETFs and stocks.

Frankly, being taxed on our income in Japan and paying high Japanese residence taxes each year, I do not feel that the Japanese government should be taxing us on our investment earnings in our home countries. Especially when we are already paying taxes on dividends or property taxes, etc. to our local and federal governments.

Instead, the Japanese government should be doing all it can to reign in the Japanese yakuza and all of their illegal enterprises and the Japanese corporate criminals that do so much harm to society.

[kzjohn]

[nightsintodreams]

Stumptowny wasn't talking about relinquishing citizenship though, was he? So your comment is completely irrelevant.

[nicenicegaijin]

Stumptown,


The first thing that I found interesting in the article was this:

If you think you might fit into this category, there is a likely reprieve: As a foreigner you will be allowed to exclude the years in which you may have held a visa other than the type that is termed as a permanent resident visa.

So, as long as you don't have a permanent resident visa, you are safe. I never saw the point of having a permanent resident visa as I am only in Japan as long as there is work in Japan.

Hypothetically speaking if I was a high net worth individual, if that is what they are calling people with 850.000 usd plus in assets these days, these laws do not worry me as I am not a permanent resident, and there are other ways to move money around quite easily. Being from a rich family, one learns the tricks of the trade so to speak. Hypothetically speaking one could just fly to Europe twice a year where one has their vacation home and pop by BIL in Luxembourg and deposit 20.0000 USD/EURO or when the yen is weak bring yen, twice a year if one can save that much. The wife takes 10.000 and you take 10.000 in cash or a bit of gold, some in the underpants, some in the wallet a bit in your carry on to minimize the risk of losing the whole lot and fly via an airport hub near Luxembourg, get a hire car drive to the bank and deposit. Of course until you deposit you are under a lot of stress and keep checking to see if you haven't lost it and become a bit paranoid. Have lunch in a pizza restaurant take a nice drive through the Loire valley to San Sebastian drop off your hire car pay the excess for not having brought it back to the point of origin, if that is where you holiday home is, stopping by nice hotels and castles on the way and turn it into a holiday. It is pretty old school but that is about the only way to do it without leaving a paper trail. When you contact your bank never e-mail, only fax as it cannot be traced.
Other tips are make sure you parents gift you their house and put all their money into your bank account to avoid inheritance tax, plus this aids them as it helps them avoid the world wide asset sting the euro governments are up to these days as if you live in Japan you are a non-euro resident.

[mitsui]

Really? My mother passed away in February, and my brother or I have to file a 1040x?
I don't know her income for last year. It was just Social Security.

[G Cthulhu]

Well, that was entertaining reading, but probably not for the reasons hoped for by the OP. :)

First off, the number of people teaching engrish in Japan who post here & who would hit the threshold for triggering this would be, IMO, fewer than half a dozen.

Second, it applies to nationals and PR's. If you're planning on leaving Japan and have that much wealth then you should be doing some serious financial planning anyway: it's a tiny step in that process to surrender PR before leaving so you leave on another visa. Problem evaporates at that point.

Thirdly, just as a note about the "take cash if it's over $10k" idea: if you leave or enter most countries (Japan, the US, Canada, all of the EU) with $10,000 or more then you are required by law to declare the amount you are carrying. Failure to declare is a criminal offence in all the countries mentioned, and (in the case of the US and some EU countries) usually results in automatic forfeiture of the cash carried. That is to say, that was amazingly terrible "advice" on that point.

[kzjohn]

In the states, another danger of carrying cash is civil forfeiture.

If the police happen to find your large cash stash, they can, on the spot, deem it drug/crime-related and confiscate it--and it then becomes a real hassle to get back (lawyers, personal time, etc).

[kzjohn]

[nicenicegaijin]

[stumptowny]

G Cthulhu:

Have you been in Japan for 5 years? If yes, then you are a PR FOR TAX PURPOSES. Doesn't matter what your visa/gaijin card says or the paper work you did or didn't do. You don't have a choice.

While this new exit tax is a very high bar of 850k USD, the taxation of worldwide assets for anyone in japan (and not leaving) is a much bigger issue. There is no 850k threshold. If they sniff you out and you have assets abroad, you are done for. Whether it's 50k or 300k and in any form of asset.

The exit tax is a particular rub for biracial families who want to move away. I have a number of friends who want to relocate for their kids' schooling and they have cumulative assets abroad that meet this high bar. believe it or not, for anyone with a half responsible saving scheme and who is aging, 850k is not that much frankly. lots of goofs drinking it away in roppongi year after year but others, not so much. and compounding interest is the magical elixir of investing.

Carrying money out: 10,000USD OR MORE for declaration. This is still very good advice IF you are doing it on your bon voyage from japan. there are no customs duties, taxes or other fees paid to U.S. Customs for the international transportation of the money; no limits either. as much as you want. it is merely a reporting requirement to U.S. Customs. same rules for leaving japan. problems occur if you don't declare over 10k. If you did this multiple times and returned to japan each time, this will trigger some red flags, I am guessing. like, time to open up a chain of los pollos hermanos or a car wash.

don't lie, scam, or hide anything, unless you are a sketchy person....

nienicegaijin: You are welcome here. This behavior is not >>

"Stumptown, If you want this thread to remain, I suggest you be civil when talking to me and I will do the same."

You are neither a moderator or a user so privileged that you can make open threats. completely unprovoked ones at that. Remove this bit or I will report you.

I encourage everyone to report the first post of nicenice's in this topic until it is edited/removed. house cleaning... Then stick around and stay on topic!

[nicenicegaijin]

Stumpown,

What I meant was please let's try to not start arguing etc.. as it is often annoying when good threads and discussions are removed. It wasn't meant as a threat or a provocation. So, I will apologize for the way it came across. Edited

Getting back to the tax issue. And I am speaking hypothetically, if I was a rich person with 850.000K assets, how will the Japanese tax authorities know my total worldwide assets? I rent in Japan, pay all high ticket items in cash. It is impossible for them to know. Like I said, every year I take two vacations abroad and bring around 20.000 usd each trip 10K and my wife takes 10K, we pass by Luxembourg and physically deposit it in the BIL. No transfers, no paper trail, how would the Japanese authorities be able to tax me, like you say I could have spent the money at gaspanic in Roppongi.

[G Cthulhu]

[zues]

Was reading intently here.

nicenicegaijin... you are trolling here, as the op stated. He seems to have put you in time-out but is giving you a chance to behave. I recommend you do so, to stay in the good graces of this cafe. Or I'll report you as the op suggested.

I find this topic very informative otherwise.

[nicenicegaijin]

G Cthulhu,

Flying Japan to Europe with my wife we never get checked nor do we ever declare to be bringing over more than 10K. I think you are right that it is based on the traveling party, but with euro notes coming in bills of 500, 10K fits in the wallet and isn't even that much of a pain to sit on. I think the Euro authorities are more intent on stopping drug smugglers than uni teachers taking 20K into the country. In fact I have never had my suitcases checked and I find it the easiest way to take money out the country and get it offshore. (this is not true by the way but just a hypothetical situation)