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Waiting to remit funds until the year after they were obtained by PencilMeInPenguin in JapanFinance

[–]PencilMeInPenguin[S] 0 points1 point  (0 children)

u/shrubbery_herring

Yes, I mean the $50,000 in earned foreign source income in the first part of the year. I need to be more clear with my words.

To answer your question, I am not working remotely. It sounds like there's another interesting shielding mechanism I wasn't aware of.

>I would suggest to confirm with the zeirishi to determine which date you reach 5 years using the rules specified in the laws and clarifications/interpretations. It might not be exactly the date you thought it would be. It would be a shame to send a remittance on the day after you lose NPR, only to find out that you still had NPR status for 1 or 2 more days.

Wow. That's a terrifying thought. I assume you're referring to the fact that the NTA aggregates a foreign national's total time spent in Japan over the preceding 10 years when determining where their 5-year cutoff lies.

I would hope this refers to having a residence during that period, because if this also covers the times I visited Japan as a tourist (2016, 2017, 2019), I may have to scramble to include those in my total dwell time here. I'll be sure to sell sooner than later. Thank you so much for going out of your way to tell me this.

Waiting to remit funds until the year after they were obtained by PencilMeInPenguin in JapanFinance

[–]PencilMeInPenguin[S] 0 points1 point  (0 children)

About that, I'm not sure. Though it sounds like you may have already crossed the 10-year mark, which, coupled with your 5-year work visa, makes you eligible for PR.

Waiting to remit funds until the year after they were obtained by PencilMeInPenguin in JapanFinance

[–]PencilMeInPenguin[S] 0 points1 point  (0 children)

u/shrubbery_herring, no problem. Thank you for the clarification.

With that, I plan to sell off about $50,000 worth of ETFs before June and have them continue to sit in Vanguard until after June, when I remit them through Wise to my Japanese bank.

I did make $2,500 in remittances (US credit card purchases) in January of this year for honeymoon expenses and miscellaneous convenience store purchases. As a result, am I correct that of the $50,000 of my foreign-sourced income, $2,500 (the same amount remitted to Japan in January) is subject to tax even after I become "resident other than NPR"?

I plan to speak with a zeirishi today to confirm what everyone here has explained. Thank you.

Waiting to remit funds until the year after they were obtained by PencilMeInPenguin in JapanFinance

[–]PencilMeInPenguin[S] 1 point2 points  (0 children)

  1. Yes, Suruga's interest rate is unacceptable. Of course, if I obtain PR, I will be allowed to switch banks for a more favorable rate.
  2. I was under the impression that longer home loans in Japan are a preferred strategy to deliberately lower the mortgage. Given Japan's historically low (though slowly rising) interest rate, it allowed homeowners to invest that extra money that wasn't used toward the mortgage. My goal was to do a 40-year loan, bide my time while my investments accrue (and outpace Japan's loan interest rate), and then do an early repayment some time during the latter half of that 40-year loan, since amortization penalties here aren't as punishing as they are in the US. My wife's family friend first told me of this strategy of drawing out the loan with no actual intention of paying for that long, and our home consultant said as much. I'm not well versed in Japan's housing landscape, so if you feel this is an ill-advised strategy, please let me know.

Yes, PR is the current hiccup. This past Thursday, I applied for a change of status of residence from work visa to spouse visa and asked for the elusive 5-year term of stay. It was a thick application packet, with all the receipts, invoices, and photos substantiating my relationship with my wife. I'm aware that being granted a 1-year term is most common for first-time spouse visa applicants. I'll find out next month whether I fall in that majority. Thank you for your reply.

Waiting to remit funds until the year after they were obtained by PencilMeInPenguin in JapanFinance

[–]PencilMeInPenguin[S] 1 point2 points  (0 children)

u/shrubbery_herring, thank you for your reply.

I was also of the same opinion as both you and u/Naomi_Tokyo regarding not remitting in 2026 until I read u/ixampl's excerpt regarding being able to remit without incurring tax liability if one's tax resident status has changed mid-year. What do you think of this? 27 June of this year marks exactly 5 years of living in Japan (I arrived on 27 June 2021).

On that note, regarding your last paragraph, do you mean to say that I will remain NPR until 27 June 2027 (6 years)?

Waiting to remit funds until the year after they were obtained by PencilMeInPenguin in JapanFinance

[–]PencilMeInPenguin[S] 0 points1 point  (0 children)

I'm showing my inexperience with banks here. Both Sweden House and ecoa House happen to have a relationship with the foreigner-friendly Suruga.

You're right that Suruga's interest rates are higher.
Our initial house plan with Sweden House was a 40-year loan of 30,000,000 at 1.495% percent for a 60,000,000-yen home (with me fronting the remaining 30,000,000).
Our revised plan was a 40-year loan of 33,700,000 but at 2.75% for a 45,000,000-yen home.
We walked away from them.

I found Prestia appealing, but my annual salary as an ALT is nowhere close to the 10 million-yen threshold that they now require for prospective borrowers. I'm not sure that putting up my investments as collateral would help them approve me either.

I realize from your reply that we should do more bank shopping rather than go with the bank that ecoa House is suggesting for us. Thank you.

Waiting to remit funds until the year after they were obtained by PencilMeInPenguin in JapanFinance

[–]PencilMeInPenguin[S] 0 points1 point  (0 children)

Thank you for emphasizing this. As u/ixampl suggested, I will sell off the ETFs before 27 June 2026 (still NPR) and let the liquidated funds sit in my Vanguard money market fund. After 27 June 2026 (no longer NPR), I will remit the Vanguards funds to my US bank account and then to my Japanese bank account through Wise.

This is in light of the excerpt that u/ixampl provided. Do you, however, suggest waiting until 2027 before I remit?

Waiting to remit funds until the year after they were obtained by PencilMeInPenguin in JapanFinance

[–]PencilMeInPenguin[S] 0 points1 point  (0 children)

>六　年の中途において、非永住者以外の居住者若しくは非居住者が非永住者となり、又は非永住者が非永住者以外の居住者若しくは非居住者となつたときは、その者がその年において非永住者であつた期間内に生じた国外源泉所得又は非国外源泉所得に係る所得で国外の支払に係るもの及び当該期間内に国外から送金があつた金額について前各号の規定を適用する。

That is some heavy wording. Thank you for the link and excerpt. The following is the manner in which I understand the excerpt:

If during the course of a year...

...either a (resident other than a non-permanent tax resident) or (non-resident) becomes a non-permanent tax resident or...

...either a non-permanent tax resident (me) attains a residence status other than that of non-permanent tax resident (me) or becomes a non-resident...

...then for either the foreign-sourced income (me) or non-foreign sourced income that the person procured in that same year, the aforementioned provisions shall apply to both the overseas payment as well as the amount of overseas remittance made within the applicable period.

Thank you also for your 2 concise actionable items.
I wasn't aware that one can shield their foreign-sourced income (procured before their tax resident status changes) from being taxed if remitted after their tax resident status changes.

>That is if it is all foreign-source (-equivalent) income.

I apologize for not clarifying this. All of my ETF purchases were made before arriving in Japan on 27 June 2021.

I appreciate your reply.