Tax on NZ house for Japan resident

[samm]

Hello people!

I'm a kiwi guy with a rental property in New Zealand but I've been living and working in Japan on a spousal visa for the last 10 years.

During that time I've been paying my salary tax in Japan and my rental income tax in New Zealand. I recently heard from an American friend that I might have to pay the rental income tax in Japan.

Can anyone confirm whether this is true or not?


I've had a look at the double tax agreement and the excerpt below makes me think I'm OK to continue as I have been.

Income derived by a resident of a Contracting State from immovable property (including income from agriculture, forestry or fishing) situated in the other Contracting State may be taxed in that other Contracting State.
- taxpolicy.ird.govt.nz/sites/default/files/tax-treaties/2012-dta-nz-japan.pdf

A quick web search suggests a house is immovable property.

[klauster]

I might have to pay the rental income tax in Japan.

Actually it depends on where you are tax resident and if there is a double taxation agreement is in place.

E.g. Tax resident in NZ would declare income/tax in NZ including income from oversea and paid overseas tax. The double tax agreement overrides the domestic law of the contracting states, so the taxed overseas income received is not taxable in New Zealand.
My question would be - has Japan a double tax agreement with NZ?

[Anthonyacat]

I've had a look at the double tax agreement and the excerpt below makes me think I'm OK to continue as I have been.

Income derived by a resident of a Contracting State from immovable property (including income from agriculture, forestry or fishing) situated in the other Contracting State may be taxed in that other Contracting State.
- taxpolicy.ird.govt.nz/sites/default/files/tax-treaties/2012-dta-nz-japan.pdf

A quick web search suggests a house is immovable property.

Not an expert on Japanese tax law, so ask a Japanese accountant to get full clarity, but that excerpt from the Double Tax Agreement just says that NZ can tax the rental, it doesnt say Japan can't.

If Japan can tax the NZ rents, you will be given a credit for the NZ taxes already paid.

[Nick G]

I know about this in a lot of detail. Email me "nick at ifindproperty dot co dot NZ"

[samm]

Actually it depends on where you are tax resident and if there is a double taxation agreement is in place.

Hi Klauster, thanks for chiming in. I am a tax resident in Japan.

has Japan a double tax agreement with NZ?

Yes, Japan has a double tax agreement with NZ.

My question to you is, are you saying that I still need to declare my NZ rental property income when doing my tax return in Japan?

Cheers.

[Nick G]

Yes you should be doing as of year 5 in Japan. There's a lot to it. Anyway, you emailed me so I'll help you sort it.