Japan follows the money to target tax avoidance

Tokyo readies incentives for transparency in reporting foreign asset holdings

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Japan's reporting system for foreign assets misses bank transactions and other money flows, opening the door to tax avoidance. © Reuters

YUSUKE TAKEUCHI and RYOHEI YASOSHIMA, Nikkei staff writers

TOKYO -- Japan will adopt a carrot-and-stick approach toward tax avoidance as it pushes wealthy residents to keep records of transactions involving foreign assets.

Residents that hold more than 50 million yen ($462,000) in assets outside Japan will be encouraged to maintain records that track money flows. These include dividends and capital gains from foreign securities as well as bank transactions and rent from overseas properties.

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