It was recommended to me to consult this community about my issue (I made a similar post in the RetireJapan forum, but this may be the more appropriate/knowledgeable place).
I have reason to believe that my accountant, who has prepared my tax returns since I moved to Japan in 2017, has made severe mistakes in underreporting my income over all these years. I am working remotely for an Australian company, and part of the compensation is contributions to Australian Super (a private retirement fund with compulsory monthly contributions from an employer).
I believe none of these contributions have been added to my previous tax returns, even though they are listed on the pay slips. I only found out about this yesterday when I used AI for an unrelated matter, and I discovered this issue. AI isn't the most reliable source for this, but it had me worried enough that I want to take steps to get clear answers.
I came to Japan overwhelmed by procedures and systems, so I thought the safest way to avoid mistakes with my taxes would be to have a professional tax accountant prepare and submit my annual tax return. Since I'm employed at an overseas company without an office in Japan, I'm responsible for filing my own taxes here.
In my related RetireJapan forum post, someone mentioned page 28 of this official NTA PDF: https://www.nta.go.jp/taxes/shiraberu/shinkoku/tebiki/2024/pdf/050.pdf , particularly this section:
You are eligible for this deduction if you pay premiums, etc. or premiums, etc. are withdrawn from your salary for health insurance, National Health Insurance, social medical insurance for the old-aged, long-term care Insurance, labor insurance, National pension, national pension fund and employee pension insurance, etc. of yourself, your spouse or relatives living in the same household as you
While that sounds encouraging, I wouldn't be surprised if that only refers to the Japanese employee pension system (kōsei nenkin).
My plan forward is this:
- I will have my past 5 years' tax returns (due to statute of limitations) checked by an independent tax accountant, amended, and, if my suspicion is true, I will have to pay back significant amounts: the underreported income tax, delinquency tax (entaizei), and back payments for residence tax, national health insurance and pension, likely with penalties and late fees. My rough estimate is that this could be a total of around 5 million yen (including penalties and interest). At least, if I voluntarily amend the mistake, the under-reporting penalty tax (kashō shinkoku kasanzei) should be waived, which would be a significant sum if I got an audit. The problem is that it's not easy to find an accountant willing to do this because most are just unfamiliar with Australian super.
- When I know that there was indeed an issue caused by my original accountant, I will try to take steps to recover costs from him, i.e. all penalties and late interest and fees, the cost for the independent accountant for checking and amending the past tax returns, and possibly the fees the original accountant charged for preparing these tax returns.
Is there anyone with a similar experience? Does my plan make sense, or are there things that I'm overlooking?
Any help is much appreciated.
by Rossi3000