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Economy

Japan tax watchdog obtains data on 400,000 overseas accounts

Citizens reported only around 9,000 foreign accounts in 2016

Japan joined an effort led by the Organization for Economic Cooperation and Development designed to uncover wealthy tax evaders.   © Reuters

TOKYO -- Japan's National Tax Agency collected information on 400,000 overseas bank accounts held by Japanese individuals in about 50 countries and regions as part of efforts to uncover assets stashed abroad, a source told Nikkei on Sunday.

The number of accounts dwarfs the roughly 9,000 reported by Japanese citizens in 2016 through filings legally required for anyone keeping over 50 million yen ($446,000) in foreign assets. The tax agency will compare the two sets of information as part of its hunt for hidden assets.

Japan obtained the data this fall through its first participation in an annual international exchange designed to combat tax evasion.

Such data exchanges under the Common Reporting Standard, formed by the Organization for Economic Cooperation and Development, began last year. Tax authorities in participating countries and regions require domestic financial institutions to report on accounts held by foreigners, including the holders' names, addresses, balances and gross annual income from interest and dividends.

The 102 current participants include tax havens like Panama and the British overseas territory of the Cayman Islands, but the U.S. is sitting out.

In return for its haul, Japan apparently provided roughly 50 nations and regions with information on about 90,000 accounts in the country, the source said. Parties may submit additional information later.

Japan has bolstered tax enforcement against wealthy individuals in recent years. Additional taxes totaling 4.1 billion yen were imposed after a probe using data such as overseas remittances uncovered 478 cases of undeclared income and other wrongdoing during the year ended in June 2017.

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