Overseas Remittances and Tax: The Reporting Rules to Know
Remittances to your home country, and assets held abroad. How does the tax office grasp these, and what must you declare? We organize the tax rules around overseas remittances and foreign assets — where "I didn't know" is no excuse.
- The tax office sees overseas remittances
- Remittances over ¥1 million and the overseas-remittance record
- The obligation to file a foreign-asset report
- Adjusting for double taxation on foreign income
01The tax office sees overseas remittances
The first thing to know is that there is a mechanism by which overseas remittances above a certain amount are reported by financial institutions to the tax office. The idea that "it's overseas, so they won't know" does not hold.
02Remittances over ¥1 million and the overseas-remittance record
When there is a remittance to, or receipt from, abroad exceeding ¥1 million per transaction, the financial institution submits an "overseas-remittance record" to the tax office. This lets the tax office grasp who exchanged how much with abroad, and when.
| Item | Details |
|---|---|
| Scope | Overseas remittances/receipts over ¥1 million per transaction |
| Submitter | The financial institution |
| Submitted to | The tax office |
03The obligation to file a foreign-asset report
A resident who holds a certain amount of assets abroad (a total exceeding ¥50 million) is obliged to file a "foreign-asset report". This includes overseas real estate, deposits, securities and the like.
04Adjusting for double taxation on foreign income
A Japanese resident is, in principle, taxed in Japan on all income, domestic and foreign. However, if you have already paid tax abroad, the "foreign tax credit" may adjust for double taxation. Taxing rules may also be set by "tax treaties" between countries.
For those with income or assets abroad, an omission can later lead to a large back-tax bill. Consult a specialist early. We support you in five languages.
Summary
Overseas remittances over ¥1 million are grasped by the tax office via the overseas-remittance record.
Holding over ¥50 million of assets abroad triggers an obligation to file the foreign-asset report.
Foreign income can be adjusted for double taxation via the foreign tax credit or a tax treaty. If unsure, turn to a specialist.
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Sources & References
This article is based on information available at the time of publication. Rules and systems may change. Please consult a professional before making any individual decisions.
