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Hi Blog. In the wake of treating Non-Japanese Residents like they’re riddled with extra Covid contagion, here’s yet another example of how Non-Japanese taxpayers are treated with extra suspicion — with bored tax auditors even in the most rural areas of Japan dedicated to ferreting out rank-and-file sneaky foreigners’ assets and earnings socked away overseas. Courtesy of Debito.org Reader “Tired Panda”, edited and reproduced here with permission.
According to numerous sources, “Japan has explicitly stated its goal is to make Tokyo the number one financial city in Asia… Japanese officials see an opportunity to lure the Asian headquarters of global financial firms to Tokyo as Hong Kong struggles under new scrutiny from Beijing.” In a business climate like the one being described by “Tired Panda” below, who wound up giving up Permanent Residency status after being zapped by local tax authorities, this seems unlikely to happen in Japan.
Any Readers out there who can help this person out? Debito Arudou, Ph.D.
From: “Tired Panda”
Subject: Foreign taxation accountants in Japan
Date: January 2, 2021
Firstly, thank you for the tireless work you have done over the years to uncover the systemic racism in Japan and demystify many of the baffling issues ever present for a non-Japanese living in Japan.
I arrived on these shores in 199X, and after leaving the JET program, I went on to do various gigs and also teach in some of the Universities around the [Katainaka Prefecture] area.
In 201X, I joined a Japanese company, under the umbrella of a global company, and still work there to this day, now as a contracted employee. My salary has never increased and I have never received a bonus.
However, my beef is not with the contract (that’s a separate issue), it is with the ever increasing harassment by the [Katainaka Prefecture] Tax department.
I have scoured your columns to look for information on the “exit tax” which came into effect in July 2020, and also for any links to taxation experts.
Of course, there are the giants like KPMG and Price-Waterhouse Coopers, but they are geared more to the highly paid CEOs and other foreign workers whose taxation is more of a corporate nature.
It started with my tax accountant in [Katainaka Prefecture], who I have used for several years, suddenly asking me to declare my worldly assets, including how many mountains I owned. Being unaware of any such requirement, I was stunned by this and resisted but my accountant said just roughly write it down and as long as it’s under 5,000,000 you’ll be OK. Just sign it.
The tax department audited me a couple of years ago covering a period of 5 years. They have two young recruits whose full-time job is to concentrate on foreigners. They speak no English. They produced figures suggesting I had been evading taxes over this time and the amount of tax payable. They would not say what shares or investments were the source of the income and I had no way of disputing any figures. I’m aware that tax losses can be carried over to offset gains but they would not recognize this for my foreign investments, saying something about a “blue paper”. I made a start on trying to track everything over the years, but gave up when it became evident that unless something was in the format they required, such as a statement from Monex Japan, they would not accept it. They also slapped a penalty on each of the year’s taxes, compounding over the five year period. It became obvious that it was futile and I paid a substantial amount.
I thought this was the end of that horrifically stressful saga and I would make sure to try and do everything required and account for everything down to the last cent. I decided to revoke my permanent residency as I can’t see myself living indefinitely in this country which is forever tightening the tax noose in an effort to pay for the aging population. With the sponsorship of my company and using the new points system I changed to “Highly Skilled Professional (i) (b)” status.
I recently received an email from my accountant saying that the [Katainaka Prefecture] tax department is asking if I actually had more than 5,000,000 yen when I signed the statement over 5 years ago. I have ignored this.
I remember seeing that with the visa status I have, I do not need to declare foreign income. I don’t remember where I saw that, but I have no doubt that my current tax accountant is blissfully unaware of the implications of my current visa. I advised him for his information but received no response. The last communication was a relaying of the question from the [Katainaka Prefecture] Tax Office.
So, after that long-winded explanation, my question is; are you able to direct me to an English speaking tax accountant… who would be able to correctly lodge a tax return for me and offer advice? As I mentioned, the international tax specialists mentioned above are quite exorbitant, so I’m looking for a smaller scale accountant firm.
Thanks again and kind regards, “Tired Panda”
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