The government is set to tighten rules on disclosure by Japan’s wealthier residents about their overseas assets in a bid to prevent tax avoidance, sources close to the matter said Sunday.
It will urge people with overseas assets of more than ¥50 million ($462,000) to keep records of transactions made using their foreign bank accounts, the sources said. If they are found to have failed to declare foreign assets but then submit such records, authorities will apparently reduce the amount of penalty taxes.
The measure will be introduced in fiscal 2020, which starts April 1, as part of annual tax reforms set to be drafted later this year, the sources said.
Under the current rules, the government obliges domestic residents to declare the types and amounts of their overseas assets if they total more than ¥50 million.
But tax authorities believe there are many who have defied the rules, so the system will be expanded to include the new requirement to keep documentation on cash flows.
The move is expected to help authorities look into people who allegedly hide assets using offshore havens or avoid taxes through overseas transactions, the sources said.
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