Hi All, I’m trying to make sense of Japan’s rules for capital gains tax on foreign stocks.
Suppose I have the following situation:
1 January: transfer 100,000 yen to my USD account at USDJPY rate of 100
So now I have 1000USD in my account
1 June: purchase shares worth 1000USD but now USDJPY is 90
1 December: stock price doesn’t change so I sell shares worth 1000USD but now USDJPY is 100 again
I believe Japan will now tax me for my FX gain of 100/90-1=11%. Is that right, it seems nonsensical.
Thanks.
1 comment
Maybe you would like r/JapanFinance
Focusing on the stock trade only part of this, yes, you have to figure in the currency changes. So if you bought something when the rate was 80:1 and sold when it was 120:1, that’s a huge gain in yen terms–apart from what the value of the stock/ETF had done in the meantime (in dollars, etc). Of course it might sometimes work the other way, too–something you bought last fall when the yen was 148, and sold now at 132.
Use the specific TTM rate for the date of purchase, and then the date of sale. Similar for dividends, but only one date involved, the TTM on the date the div was paid.