As gold prices surge, more sellers fail to report sales
Tokyo-Japan (Nov 24) There has been a sharp increase in the number of people failing to report taxable earnings from the sales of gold, silver and other precious metals.
Undeclared proceeds climbed to ¥16 billion during one year to the end of June, with a total of 3,193 offenders listed nationwide — a 2.6-fold rise from three years earlier, according to tax officials.
A steep rise in profits driven by rising prices of gold and other precious metals is a key factor behind the growing number of cases of unreported taxable income.
National tax authorities have requested precious metal dealers to inform them about individuals who have gained large profits from sales, a move aimed at making it easier to grasp the full amount of profits gained by individual sellers. The authorities have also asked the dealers to remind sellers that they must report their earnings without fail.
According to the Osaka Regional Taxation Bureau and other sources, during one year until June 2011, when the bureau started to keep statistics, 962 people failed to report a total of ¥6.1 billion in income from sales of precious metals. The figures climbed to 1,309 cases involving ¥7.9 billion during one year until June 2012 and 1,813 cases involving ¥10.7 billion during one year until June 2013.
Profit obtained by selling such precious metals as gold is categorized as “transfer income” under the Income Tax Law. Tax is calculated from the amount remaining after deducting purchase prices from selling prices and after a special deduction of ¥500,000 is made. If the period of ownership for precious metals exceeds five years, the taxable amount is halved.
A tax rate between 5 and 40 percent is imposed for amounts combined with other income, including employment and business income.
According to Tokyo-based major precious metal sales firm Tanaka Kikinzoku Kogyo K.K., gold was being traded at about ¥4,300 per gram as of September this year, three times more than prices 10 years ago. As the historic high prices continue to rise, increasing numbers of individuals are selling off their gold. An employee of a shop that purchases precious metals in Osaka said: “Five years ago, we had one or two transactions a day. But since last year, we’ve had about 10 transactions every day.”
Commenting on sellers of precious metals, a national tax official said: “Many people are unaware that profit gained from selling gold is taxable. Of course, there are also those who intentionally choose not to declare their transactions.”
A man in Osaka who made about ¥2.4 million by selling gold in 2012 said he was unaware he had to report the income. Following advice from a tax office, he submitted a report. But the declaration period was over by then, so he ended up paying about ¥110,000, including additional tax for late payment.
Because of rising gold prices, the Income Tax Law was revised to monitor profit obtained by selling gold, and national tax authorities also implemented new reporting requirements in January 2012. The requirements obliged buyers to report the seller’s name, address and the amount of payment to authorities when their purchases exceed ¥2 million. By utilizing information obtained through the system, authorities say more and more cases of undeclared income are being discovered.
“We’d like to strengthen our surveillance as it is likely that prices will continue to rise,” a senior tax official said
.
Source: Japan.News
