Japan tax agency begins info exchange on foreigner-held accounts with home countries

Posted by On 12:44 AM

Japan tax agency begins info exchange on foreigner-held accounts with home countries

TOKYO -- The National Tax Agency (NTA) has begun to regularly exchange information on accounts held by foreigners and foreign companies at Japanese financial institutions with the tax authorities of their home countries to prevent tax evasion by hiding assets overseas.

The exchanges, with nations and regions that have signed taxation treaties with Tokyo, are based on the Common Reporting Standard (CRS). Japan has shared information on interest, dividends and remuneration under the standard, but this is the first time that the country has exchanged bank account details.

"The measure will ensure transparency of assets held overseas, and prevent inheritance tax evasions," said an official of the agency's International Operations Division. "Promotion of international cooperation in such efforts will make it difficult to hide assets abroad. We hope that taxpayers will voluntarily declare assets they hold outside the country."

Under the system, the NTA had gathered information on some 550,000 accounts held by foreign citizens and entities from 64 countries and regions mainly in Asia and Europe as of Oct. 31. The agency had provided information about 90,000 accounts to 58 countries and regions by the end of October, according to the International Operations Division.

Individuals with 50 million yen or more in assets outside Japan must report them to the NTA, and the agency is comparing those declarations with information from tax authorities of other countries to check for concealed holdings. The agency also intends to utilize the information in its tax collection work, and assess the system's efficacy.

The CRS was established by the Organisation for Economic Co-operation and Development (OECD) in 2014 due to the use of tax havens by wealthy individuals and multinational corporations seeking to evade taxation.

Countries using systems based on the CRS must require domestic financial institutions to report information on accounts held by foreigners and foreign companies, including names, addresses, countries of residence and account balances, to local tax offices. The tax authorities of participating countries regularly send such information to the tax authorities of account holders' home countries through CRS systems every year.

As of Oct. 5, 2018, 102 countries and regions had announced their participation in the system to exchange information on bank accounts held by foreign individuals and businesses. Beginning in September this year, Japan can exchange information with 88 countries and regions that have met certain standards such as information security.

(Japanese original by Yoshihiro Sakai, City News Department)

Source: Google News Japan | Netizen 24 Japan

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