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Living in Japan for over a year has prompted me to delve into its tax system, comparing it to the Dutch tax system in order to better understand the implications for my finances. I’m particularly interested in the asset wealth tax to compare how it affects me in both countries.

Comparison of Asset Wealth Tax in Japan and the Netherlands

Japan

1. Wealth Tax: Japan doesn’t have a specific wealth tax; instead, wealth is indirectly taxed through property taxes and inheritance taxes.
   • Property Tax:
     • Fixed Asset Tax (Kotei Shisanzei): An annual tax on land, buildings, and depreciable business assets, set at 1.4% of the assessed value, with potential increases for properties valued over a certain threshold.
     • City Planning Tax (Toshi Keikakuzei): An additional annual tax for urban areas at a rate of 0.3% of the assessed value.
   • Inheritance Tax:
     • Progressive rates from 10% to 55%, depending on the value of the inherited assets and the relationship between the deceased and the beneficiary.
   • Gift Tax:
     • Similar to the inheritance tax, with progressive rates from 10% to 55%.

Netherlands

1. Wealth Tax: The Netherlands doesn’t have a specific wealth tax; instead, wealth is indirectly taxed through income tax on savings and investments.
   • Box 3 Tax (Savings and Investments Tax):
     • Individuals are taxed on the assumed yield of their net assets rather than the actual income from those assets, with tax-free allowances and varying rates of return.
   • Property Tax:
     • Onroerendezaakbelasting (OZB): A municipal property tax on the ownership and use of real estate, with rates determined by the municipality.
   • Inheritance Tax:
     • Progressive rates from 10% to 40%, depending on the value of the inheritance and the relationship between the deceased and the beneficiary.
   • Gift Tax:
     • Progressive rates from 10% to 40%, with various exemptions based on the relationship between the giver and the receiver.

Key Differences

1. Tax Structure:
   • Japan focuses more on property and inheritance taxes, with no direct tax on wealth, while the Netherlands taxes assumed yields on net assets under Box 3 of the income tax system.
2. Rates:
   • Japanese property taxes have fixed rates on assessed values, while Dutch Box 3 tax involves assumed rates of return that vary with asset value, resulting in a more complex calculation.
3. Inheritance and Gift Taxes:
   • Both countries have progressive tax rates, but the specific thresholds and exemptions differ.

Understanding these differences will help me plan my financial strategies and tax obligations in both countries.

Sources:

• Japan:
  • Ministry of Internal Affairs and Communications (Japan)
  • Japan External Trade Organization (JETRO)
  • National Tax Agency (Japan)
  • Japan Tax & Public Finance Newsletter
• Netherlands:
  • Dutch Tax and Customs Administration (Belastingdienst)
  • Expatica
  • Dutch Municipalities
  • Expatica

For the most accurate and up-to-date information, refer to the respective tax authorities’ official websites or consult a tax professional. As a disclaimer, this information is based on personal research and understanding, and professional advice should be sought for individual tax questions.

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