The Japanese individual tax system has a rules that govern such loss offset which are discussed in this article. Below is a worked example of how these rules apply in practice so it is helpful to read it together with the earlier referenced article.
Where such offset is not available a taxpayer may find themselves carrying forward a tax loss that they cannot use or losing the benefit of a tax loss altogether, hence paying tax on an amount of income greater than their overall economic gains. Read More
In recent years the Japanese tax authorities have been auditing the declaration by Japanese resident individuals of awards of share options, restricted stock awards or similar stock based compensation made to them by the foreign parent company of their Japanese employer.
Restricted stock awards with a vesting periods of around three to five years have often been part of the compensation of Japan based employees of foreign groups in the financial sector. Read More
Interest costs and fixed asset depreciation costs are two material real estate related costs that can be treated as ‘Necessary Expenses’ under the Japanese Income Tax Law (‘ITL’) article 37 and hence which are deductible for Japanese tax purposes when calculating individual real estate income. This article looks at how such tax deductible interest and depreciation are calculated and some of the special considerations that which apply. Read More
“Necessary Expenses” (in Japanese ‘必要経費’ or ‘hitsuyou keihi’) are deductible for Japanese individual income tax purposes when calculating Japanese Real Estate Income, Business Income, Forestry Income and Sundry Income (in Japanese respectively ‘不動産所得’ or ‘fudousan shotoku’; ‘事業所得’ or ‘jigyou shotoku’; ‘山林所得’ or ‘shinrin shotoku’ and lastly ‘雑所得’ or ‘zasshotoku’). Read More
An individual’s taxable Japanese real estate income is the total of “revenue from real estate” less “necessary expenses” less a deduction available for individuals filing a blue form real estate tax return.
This article looks in more detail at how to calculate the first of these amounts, revenue from real estate for Japanese tax purposes. A key issue here is the timing of when rental or other real estate income is subject to Japanese tax. Read More
Expatriates coming to work in Japan will frequently maintain a property in their home country and hence may have to address how Japanese tax applies to rental or other income they earn from the property concerned. If the property is sold while they are in Japan they may also have to address the Japanese taxation of any capital gain or loss arising on the sale. An expatriate may also earn rental income from buying an investment property in Japan. Read More
The Japanese Tax Tribunal web site summarizes the results of an appeal dated 10 September 2009 concerning tax residence for an individual who went to work outside Japan while his family, whom he visited relatively regularly, remained living in Japan. Read More