OAK Tax Corporation

2012 Japanese Tax Reform (individual income taxation)

Overseas Assets Reporting
Permanent tax residents of Japan (residents of non-Japanese nationality who have lived in Japan for more than five of the previous 10  years and residents of Japanese nationalities) who own overseas assets over JPY 50 million in value must disclose such assets as of  December 31 by submitting "Details of Overseas Assets" by March 15 of the following year.
This reporting is initially required to submit for the year of 2013 by March 17, 2014.

In case of fraudulent reporting,  late filing after the due date without any allowable reasons and non-filing, penalties are imprisonment  of 1 year or less, or the fine of JPY 500,000 or less.
With regard to the penalty taxes due to understatement of income derived from overseas assets, the penalty tax rate will be increased/decreased by 5% according to whether the overseas assets have been reported properly (decreasing the penalty tax rate by 5% will  be also applicable in case of understatement of inheritance tax)
This is applied for the report to submit after January 1, 2015.

yForm of the details of overseas assetsz

Employment Income Deduction
Resident tax payers who earn employment income more than JPY 15 million will be set the upper limit on employment incomededuction  (JPY 2.45 million).
This will be applicable for the taxable year of 2013.

Employment Income Deduction
Gross mployment Income@(A) Employment Income Deduction
Up to 1,625,000 650,000
1,625,001 to 1,800,000 (A) x 40%
1,800,001 to 3,600,000 (A) x 30% + 180,000
3,600,001 to 6,600,000 (A) x 20% + 540,000
6,600,001 to 10,000,000 (A) x 10% + 1,200,000
10,000,001 to 15,000,000 (A) x 5% + 1,700,000
15,000,001 and upwards 2,450,000

Specific Expense Deduction for Employment Income
The scope of expenses allowed to deduct from employment income will be expanded. The following expenses will be added to the  scope of  specific expenses deduction.

- Expenses for obtaining certain qualifications including attorneys, CPAs, tax accountants,
- Business expenses, i.e., expenses for books and cloths and social expenses (set an upper limit of JPY650,000 in the sum)

If the sum of the specific expenses in the year exceeds 50% of the employment income deduction, the excess of the  specific  expenses  is deductible from employment income. To apply Specific Expense Deduction, the certificate approved by the employer will  be  required.
This will be applicable for the taxable year of 2013.