Hello everyone.
Today I went to the tax office to ask about gift tax rules and received information that seems to contradict the established "consensus" (i.e., what I thought were rules and law). I am considering visiting a different tax office in the city where I live next month but also want to hear your experience and opinion first.
A little bit about me:
– My visa is Engineer / Specialist in Humanities / International Services
– I have been living in Japan 4.5 years in total
– My parents are considering sending me amount of money that exceeds 1.1 million yen
It has been my understanding that if the amount of money you receive exceeds 1.1 million yen, then generally it becomes subject to gift tax. I believe you can later apply for deduction (or exemption?) if the received money will go for property acquisition or house loan but my knowledge is not good here. Besides, this is irrelevant in today's discussion.
Upon explaining my situation to the two tax officers who were hearing my case, they brought up the following page on the official National Tax Agency website: https://www.nta.go.jp/taxes/shiraberu/taxanswer/zoyo/4432.htm
Specifically, they pointed to the table and asked me a few questions. Based on my answers they inferred that I don't need to pay the gift tax. The reasons are as follows:
– I have lived in Japan for less than 10 years in the last 15 years and my visa is table 1 visa, so I fall under the category of 一時居住者 (temporary resident).
– My parents have never been to Japan (it seemed like this point could become more complicated but because my parents haven't visited Japan, we just stopped there)
– The gift falls under 国外財産 (foreign asset)
Honestly, it was hard to believe what I was hearing. The title of the webpage also looked incredibly suspicious: 受贈者が外国に居住しているとき (When the recipient resides outside Japan). I asked the officers, "Doesn't this table apply only to the cases when the recipient resides outside Japan?"(translated into English for readers here) But they denied it and told me the table applies in general regardless of this.
Now, all communications were conducted exclusively in Japanese. I have N1 and consider myself proficient in both written and spoken word. The chances there was some kind of miscommunication (i.e., they mistook gift tax for inheritance tax) are close to zero.
I am bringing this up here in order to avoid the worst case scenario: next year I don't pay this gift tax but later I am told that I was supposed to. This could easily lead to problems with getting PR in the future and, potentially, cause some legal problems. I want to avoid this at all costs but at the same time I have not really heard of gift tax returning, so you would think that it has been processed correctly up to this day.
by you-pillow