Last updated Sept. 22, 2000
Gift Tax On Non-resident
by Hiroshi Kawarazaki, Esq.
I am working in US and a U.S. resident, (greencard holder, Japanese nationality ) and live in the house that my father bought 3 yeares ago.
My father is a Japanese resident.
He wants to send U.S. $900,000 and to gift his house to me that I live now.
He wants to wire the money directly to me from his account in Japan to my account in the U.S.
Would I have to pay gift tax in Japan?
I understand that if I am not a resident of Japan, I only have to pay gift tax on the gift that is gifted in Japan.
Does the bank in Japan regard it as gifting in Japan even though I receive the money in the U.S.?
Before March 31, 2000
According to the clause 2 of article 2-2 of Japanese Inheritance Tax Law, gift tax is levied on a non-resident of Japan if gift is situated in Japan when he receives it.
And article 1-1-2 Common-6 of Inheritance Fundamental Order defines the resident of Japan as follows.
As you are a greencard holder, perhaps you are a non-resident of Japan.If your father sends money to your account in US, then it's a
problem whether cash is situated in Japan or in US at the time of gifting.
- A person who is studying in foreign country and a dependant of the person that is in Japan.
- A person who works in foreign country within short period ; approximately within 1 year.
- A person who is in foreign country temporally.
Tax bureau of Japan regards the cash is situated in Japan at the time of gifting. Japanese gift tax is levied on your $90,000,000 gift.
As the house is situated in U.S., Japanese gift tax is not levied on the
gifting the house.In the case you are a resident of Japan.Both $90,000,000 and the house gifts are subject to Japanese
gift tax.You need to to consult with Japanese tax burea before receiving
After April 1, 2000:Japanese tax law was changed.
The clause 2 of article 69 of Tax Special Treatment Law decides as follows.
If a person who receives gift is a resident of Japan or has Japanese nationality(except bellow mentioned) at the time of gifting, the entire gift is subject to Japanese gift tax.
Both the person who receives gift and who gives gift have not been resident of Japan within 5 years before the time of gifting, only the gift which is situated in Japan is subject to gift tax of Japan.
Gift tax payer is donee.
|Japanese domicile||No Japanese domicile
|No Japanese domicile |
under 5 years
|No Japanese domicile
over 5 years
|donee||Japanese domicile||The entire gift is subject to gift tax of Japan, wherever the gift may be situated.|
|No Japanese domicile
||Japanese nationality||No Japanese domicile under 5 years|
|No Japanese domicile over 5 years||The entire gift is subject to gift tax of Japan,|
wherever the gift may be situated.
|Only the gift which is situated in Japan|
is subject to gift tax of Japan.
|No Japanese nationality||Only the gift which is situated in Japan is subject to gift tax of Japan.|
If your father gives gift to you after April 1, 2000, gift tax is levied on you.
Sept. 8, 1999
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