Are you a citizen or a permanent resident of Japan? Are you aware of this new law?

A recently-passed tax law in Japan requires Japanese citizens and permanent residents to report for the first time their foreign assets (assets held outside of Japan). If you or someone you know is a citizen or permanent resident and owns assets outside of Japan on December 31, 2013 in excess of 50 million yen in aggregate value, you or they will have to be report them to Japanese tax authorities on a special new form for the first time when your 2013 Japanese taxes are filed early in 2014.

Japan’s parliament in June passed revisions to its tax treaty with the US, heightening its ability to get information from the US on delinquent taxpayers’ activities abroad while providing the US with increased means of tracking its delinquent taxpayers’ activities in Japan.

A pending US-Japan agreement (IGA) on how to implement FATCA in Japan holds numerous risks and challenges for global and Japanese corporations as well as Japanese permanent residents and citizens.

What are you doing about your overseas assets? Whether property, stocks, bonds, cash or other holdings, they may be subject to being reported if you meet the profile mandated by this new law.

Some wealthy are making plans to sell foreign assets held abroad during 2013 so they don’t have to report them in 2014. Others, including many Japanese, are still unaware of the new law. The implications of Japan’s soon-to-be-passed ‘My Number’ system (similar to US social security number), which will also affect almost everyone, as well as the recently passed revisions to the US-Japan tax treaty.

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