02/02/21

ASIA: Japan gets details on 2 mil. offshore accounts to combat tax evasion.

As published on nippon.com, Tuesday 2 February, 2021.

Japan's National Tax Agency said Tuesday it received details on around 2.06 million offshore accounts held by Japanese individuals and corporations in 86 countries and regions in the year to June 2020, under an internationally agreed standard to prevent tax evasion.

It also released for the first time the total balance held in the accounts, which amounted to roughly 10 trillion yen ($95.3 billion). The information was attained through the Common Reporting Standard, a global model approved by the Organization for Economic Cooperation and Development to ensure tax compliance.

The tax agency said it has already received information as of Jan. 15 on 2.19 million accounts in the year starting July.

"Up until now, the National Tax Agency had no idea (about these accounts). There is a chance they include many overseas assets of the wealthy class," said Nobuhiro Tsunoda, chairman of EY Japan Tax.

Conversely, Japan's tax agency provided information to tax authorities in 65 countries and regions on around 470,000 accounts held in Japan by overseas-based individuals and corporations in the year to June 2020.

The balance of these accounts, excluding those held by government-affiliated bodies, totaled 4 trillion yen.

The standard aims to improve tax transparency by calling on jurisdictions to exchange information on financial assets held in their country with their counterparts on an annual basis. Financial institutions are required to report the name and address of account holders living overseas, as well as the account's balance, among other details.

As of January, 104 countries and regions have adopted the standard, with Japan joining in 2018. The United States is not a participant.