Tax agency steps up monitoring of rich (Japan News)


Tax agency steps up monitoring of rich (Japan News)

資訊來源The Yomiuri Shimbun

Tax authorities are keeping a closer watch on wealthy people with abundant assets in and outside Japan.

Project teams to gather information on the rich have been established at regional bureaus nationwide, and the number of designated officials is also rising.

Authorities were prompted to take action out of concern that more and more citizens would believe the taxation system is unfair if it fails to properly tax the wealthy, who are typically more adept at tax planning.

“Tax authorities pointed out overseas bank accounts my client and I weren’t aware of,” a tax accountant said when recalling an inspection last autumn on the president of an information technology company who lives in Minato Ward, Tokyo. “That made me realize how serious they were.”

Prior to the inspection, the client provided the accountant — who belongs to a leading tax accountant corporation in Tokyo that has many wealthy clients — with such details as the balance of his bank accounts at home and abroad and how much he received in interest and dividends from overseas investments.

However, Tokyo Regional Taxation Bureau inspectors pointed out extra details such as companies the client has invested in and bank accounts he had virtually forgotten about.

The president was eventually deemed to have failed to declare revenue of several million yen, and agreed to file revised tax returns.

In July 2014, the National Tax Agency set up teams targeting the rich at its three regional bureaus in Tokyo, Osaka and Nagoya.

Wealthy people have a substantial amount of assets in Japan and abroad, and often consult with accountants and other experts to take complicated steps to reduce their tax payments.

One of the project teams is based on the eighth floor of the Tokyo Regional Taxation Bureau in Tsukiji, Tokyo.

Experienced officials in their 30s and 40s, who also have extensive knowledge about international tax affairs, are gathering information on the wealthy.

They treat these taxpayers, their family members and related companies as a group and analyze their assets and investment activities.

According to estimates by Nomura Research Institute Ltd., there are nearly 1.22 million households in Japan with financial assets of ¥100 million, accounting for 2.3 percent of the total.

Among those, about 73,000 households, or 0.13 percent of all households, belong to a super-rich class, with financial assets of at least ¥500 million.

Project teams at all of the agency’s 12 regional offices nationwide have been set up since July last year.

The agency has also increased the number of officials in the teams from about 50 to about 200.

These measures have been taken amid increasing public scrutiny of wealthy people’s excessive tax planning — as shown in the Panama Papers scandal that shed light on offshore tax havens.

Regional taxation bureaus nationwide conducted 4,188 income tax inspections on the wealthy in fiscal 2016, revealing about ¥44.1 billion in undeclared income.

The average tax penalty stood at ¥3.04 million per case — almost double the overall average of ¥1.54 million.

Individual inspections have typically not been made public. But the Osaka Regional Taxation Bureau’s project team pointed out that in fiscal 2015, a relative of the founder of Keyence Corp., a leading electronics maker based in Osaka, failed to declare donation taxes of ¥150 billion on stocks of an asset management company donated by the founder.

The bureau reportedly charged the relative a penalty of about ¥30 billion.

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