Japan Studying Trove of Offshore Account Information

Under the Common Reporting Standard that has been in effect for several years, Japan’s National Tax Agency says it received information of 1.89 million offshore accounts owned by Japanese taxpayers during 2019.

The Common Reporting Standard (CRS), which was developed by the OECD and went into effect in 2017, provides for automatic exchange of financial information of both individuals and businesses among foreign counterparts. The value of the accounts reported by 85 jurisdictions to Japan’s National Tax Agency (NTA), each exceeded 100 million yen (about $914,000). Asia and the Pacific region supplied information on 1.47 million accounts, Europe 295,000 accounts, and the Americas 96,000 accounts.

Going forward, Japan’s National Tax Agency (NTA) is requesting reports on accounts below the 100 million yen threshold. The NTA said it provided information on some 474,000 Japanese accounts to OECD member governments in return. The program is ramping up rapidly. Japan said it received 745,000 reports in 2018, and provided reports on 90,000 nonresident accounts in Japan.

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How This Impacts Mobility

As the Japan statistics demonstrate, countries around the world are exchanging detailed information about financial accounts held by foreigners. In the U.S., the FATCA regime is well established, and has led to enormous revenue gains as well as criminal prosecutions. That process is also now well underway worldwide. Worldwide ERC® members with employees in other countries must be aware that information on the accounts of those employees is being widely exchanged and examined and may lead to questions from other countries.

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