Job Discussion Forums

[stumptowny]

"You will be required to file tax returns and make tax payments for special income tax for reconstruction (2.1% of the amount of income tax for each year, in principle) from 2013 through 2037 annually together with income tax of respective years, for securing necessary funds for measures to carry out reconstruction from the Great East Japan Earthquake. "

Does anyone know if we actually need to file tax returns now, just to pay for this new 2.1% tax on yearly income?

With the "withholding tax system" (done by employers) most workers in Japan do not need to file a tax return AT ALL. Just wait for the tax pay stubs to arrive in the mail as it is calculated for us.

But this new NTA tax appears to be requiring people to now complete tax returns just to capture this 2.1% tax?

Question:

Will they just roll this new 2.1% tax into the tax stubs we get in the mail or do we actually have to file a return just to capture this one special tax for reconstruction of the failing Japanese economy, err, I mean for "reconstruction from the Great East Japanese Earthquake" Puh-leeze...

And any thoughts on the time honored gaijin fall-back... do nothing?

Looks like they are charging "failure to file" penalties along with late filing percentages depending on how late your filing is. Can start to add up!

I guess I answered my own question!! Would like some of you more experienced, long-termers thoughts.

All outlined below...

https://www.nta.go.jp/tetsuzuki/shinkoku/shotoku/tebiki2015/pdf/43.pdf

[mitsui]

Plus there is My Number, which should go after people who don't pay for their pension or health insurance.
Next year the consumption tax goes up to 10%.

I am surprised it took this long to think about paying for the Tohoku reconstruction, but wonder if the money will really go there.

[stumptowny]

Mitsui,

It will be a cluster f*** as all Japan is shifting to My Number and everyone in Japan now has to file tax returns for this separate 2.1% tax, whereas before, virtually no one filed returns unless they made big income. This 2.1% tax is due for the next 30 years too, as is filing your tax returns, so I guess the earthquake will be continuing for the next 30 years, just with no earthquake or reconstruction.

Bet you much of this will go toward pension, not the radioactive water flowing into the pacific each day. They need to make up the pension shortfall somehow to cover the wave of baby boomers milking the economy with high cost services.

This year should be fairly ineffective for pension and NTA to get their hooks into us. But yeah, once they get going I think they will have better inter-agency communication. This doesn't translate to competence for enforcement. That remains to be seen but the intent and direction seem clear.

Will pension actively seek people out for pension payments? They did not before, according to my Japanese friends, and myself for that matter. I have never been contacted to "please pay your pension now." Many Japanese do not pay either.

I don't see My Number changing this much, near term, as they did not enforce this before. Pension already knows about us being here without being connected to the NTA via My Number... but the NTA will be the enforcement arm of pension eventually, as they can and do chase people.

If they were really smart they would tax all of this automatically rather than giving everyone errands to complete. Tons of people in Japan opt out of pension by not paying and many will not complete the now mandatory tax returns to capture the 2.1%.

Rolling all this into your tax payments may be the future. They know what 2.1% of our annual income is without us filing a tax return. So just lump it with our payments and save of us the unnecessary paper work and time. But it will take a year or two to realize that not enough people are completing their tax returns.

My predictions:

My Number implementation will be complete by end of 2017.

Enforcement of pension payments and other due taxes will begin in earnest around 2017/18. They have tons of people to contact, chase, and assist with all this. The task is massive.

Chances of them contacting you early on will largely depend on how much money you earn/owe (if they were smart about it).

All the while, late fees for the 2.1% tax and non-filing fees for not completing tax returns are adding up for us all now...

[rxk22]

That's rather alarming. Esp since they just did the JPost IPO SPECIFICALLY to pay for reconstruction of the NE. I agree, that it is probably aimed at shortening the social spending shortfall. As old people vote more often, so I think they won't do things to make them pull their own weight like making them pay to take an ambulance, or pay the same amount as we do for visiting the doctor.

[mitsui]

Well they are after me.
in 2014 I worked 4 jobs. Then in April I went back to full time and PMAC.
So my school took care of taxes, and I paid every month as it was deducted from my salary.
I got a letter stating that I must pay the back payments for the pension from April 2014-March 2015, or else I get no pension.

Not sure when I have to pay up, whether it is by March, 2016 or if I have a year to do it.

But if I don't do this My Number stuff, what is the penalty?
So at work I have a letter which is sent to an independent contractor in Kanagawa.

My brother-in-law has a small business and he has never paid into the pension system, yet he gets away scott free.
I have paid into the system for 14 years, yet they give me a hard time.

[steki47]

[mitsui]

Well I know an ex-teacher (American) in Kanagawa who has never paid for his pension.
He has gotten away with it but I think My Number will change that.

[stumptowny]

Thanks for your feedback mitsui. It is valuable for some readers here.

Once they get their hooks into you, for pension or taxes, they stay on you.

For those who have not started pension or tax returns, it's off the radar ("scott-free"). That doesn't mean we are immune to late penalties fees if and when they do track us down. They will go retroactive with fees and penalties to get all that is owed, even if you play stupid and agree to everything once you get called in. These are the reports from those who have been called in by the NTA to rectify everything. And of course after that, they stay on you every year..

[kzjohn]

Frankly, I'm quite glad that "they will get their hooks into you." For pension, taxes, health insurance and whatever else. There's no reason that you should be able to skate free, in spite of your 'temporary' status.

The 'my number' thing is about ten years too late, and I hope they pursue both the Japanese who have been gaming the system, along with the foreigners who have been doing the same. A plague on both your houses.

[stumptowny]

FYI: got my my tax paperwork in the mail today..

kzjohn: many people are not staying here for retirement. Pension does not apply.

Also, many have assets abroad we are already taxed for. Paying double tax is what is NOT SUPPOSED TO HAPPEN via tax sharing between the NTA and IRS yet it is being used by the NTA TO double tax.

kz, you can pay my double tax to the NTA since you enjoy hooks and such. I'll forward you the bill... Lol

All other taxes should be paid, not these. Period. The end.

[mitsui]

I got something about My Number at work.
My school uses an independent contractor, and all teachers should mail something,
but nobody told us what the reason is.

Does anyone know?
Some Japanese really don't like My Number, but I don't know all the reasons.

[kzjohn]

[kzjohn]

And as for (3), really...

You now get a $100k FEIC (foreign earned income exclusion). So you'll only be paying U.S. taxes on anything beyond that.

I don't make that much.

Do you?

[stumptowny]

kzjohn,

(1) U.S. social security. research how it works. speak on the matter when you have a clue.

(2) worldwide assets are to be paid as soon as they are known, and retroactively. 5 years is believed to be the time nta can permissibly start sniffing (pr threshold). but by default, they are not requesting all IRS information for all PR's over 5 years in japan. they are using red flags regarding income and income flows. now listen up doofus, because you are all over the place with bogus information that could mislead others.... once you are sniffed out, they charge you ALL the time before that as well. for as long as you've been in japan. retroactive fees, late charges, late interest. this double taxation is mandatory except they tell you much later, so they can get massive late charges and interest from you. ask those that have shared their horror stories on the old gaijinpot threads. I read them all.

you can't hide out in japan kz, making millions and then stop right at year 5, bicycle by the nta, waving and calling them suckers.

you been here 5 years but are broke or you'd have these business ends tied up regarding worldwide assets. that or you are really stupid. you haven't a clue.

(3) this is too nuanced for you to get. again, not worth my time. your grasp of the basics needs attention first...

[kzjohn]