International property tax

Residents of Japan are required to pay income tax on their income from all sources worldwide. They need to file income tax returns in accordance with the domestic taxation schedule for income including dividends from overseas investments, real-estate income from rent on properties overseas, and capital gains on sale of properties. Special care is required because in some cases assets overseas are treated differently than those in Japan. For example, all interest on overseas deposits is taxable in Japan. Owners of assets overseas also may be subject to taxation in the countries where the assets are located. There is a possibility that they might overpay taxes, particularly in cases such as sale of real estate. Feel free to consult with us on any related needs.

Domestic

Japanese income tax applies to income from Japan and overseas sources. Taxes paid overseas are taken into consideration when assessing tax in Japan.

Overseas

Taxes apply to income on assets overseas in accordance with the tax laws of the countries in which they are located. Ex.: Real-estate rental income, interest income, dividend income

When inheritance assets include overseas assets, in some cases completion of Japanese inheritance procedures alone is not enough to ensure proper succession of such assets. For example, in countries such as the United States, Britain, Hong Kong, Singapore, Australia, and New Zealand, procedures involving the participation of a probate court might be required. Members of the Yamada & Partners group and overseas network also help provide full support for inheritance procedures and inheritance tax returns, answering questions on topics such as what kinds of taxes are assessed in the countries where assets are located and how to avoid double taxation when assets are subject to inheritance tax in Japan.

When inheritance assets include assets overseas, in some cases completion of Japanese inheritance procedures alone is not enough to ensure proper succession of the assets. For example, in countries such as the United States, Britain, Hong Kong, Singapore, Australia, and New Zealand, procedures involving the participation of a probate court might be required. Members of the Yamada & Partners group and overseas network also help provide full support for inheritance procedures and inheritance tax returns, answering questions on topics such as what kinds of taxes are assessed in the countries where assets are located and how to avoid double taxation when assets are subject to inheritance tax in Japan.

In principle, holders of U.S. citizenship or green cards for reasons such as having lived in the U.S. in the past or been born there are required to report information on financial assets held overseas (e.g., in Japan) and assets received as gifts or inheritances from foreigners who are not U.S. residents. Failure to disclose such information can result in penalties, including criminal penalties in some cases. For this reason, it is essential to address such information obligations promptly if they apply. Feel free to consult with us on this topic, since appropriate information disclosure and filing of reports to the U.S. could result in reduced penalties (or their waiver if not a U.S. resident).