Tax guidelines and regulations for large money transfers into Japan

If you’re sending a large amount of money to Japan, your recipient may need to mind the country’s gift tax. Likewise, you as the gifter could be on the hook for US taxes — and will likely need to report large transfers to the IRS.

How Japan regulates large remittances

Japanese tax laws include regulations around gifts of property, including cash. Our research indicates that there’s a yearly exemption amount, but that more than just that amount determines if the giftee has to pay taxes on what they receive.

Factors such as where your recipient is domiciled can also affect which taxes they need to pay. Because of how complex tax law is, it’s recommended that the person receiving the funds seek out a tax professional for advice.

What are the penalties in Japan if my recipient fails to file?

Penalties vary depending on a number of factors, including where your recipient lives in Japan. Some fines for late tax payments can be as little as a couple hundred yen, but even small ones can increase significantly the longer they’re overdue.

The specifics of what your recipient would face if they failed to file can be found by talking with a local tax professional who’s well versed in the tax codes of their specific region.

Compare providers for your next large transfer into Japan

Do I have to report large remittances out of the US?

Yes. In most cases, you’ll need to report large transfers out of the US to the IRS. Banks are legally required to report amounts of $10,000 or more, but some transfer specialists have been known to report as little as $1,000.

Depending on your circumstances, you’ll need to file different forms that correspond with the types of transfers you’ve made. For example, if you gave gifts of $17,000 or more in the past year, you would likely need to file the Gift (and Generation-Skipping Transfer) Tax Return form.

How much money can I send to Japan?

Since the Japanese yen is not a controlled currency, you likely won’t run into any government-set transfer limits. That’s not to say you can transfer any amount, though. Banks and transfer specialists may set maximum transfer limits per day and cumulative limits per month.

To transfer large amounts without worrying about a cap, you can look into a transfer specialist like Xe — which doesn’t have a transfer limit.

How can my recipient in Japan get the money?

Receiving money in Japan can be convenient with options like direct deposit and cash pickup. Before you send funds for cash pickup, make sure the region your recipient is in has a location close enough.

Check out our guide on sending money to Japan to get an in-depth look at how to transfer funds and where to find some cash-pickup locations.

Our Japan guides

• • US Dollar to Japanese Yen Exchange Rate: Live exchange rates, historic exchange rates and money transfer calculator
  • Sending money to Japan: How to send money to Japan from the USA, safely and affordably.

Bottom line

Taxes on large remittances to Japan are going to vary based on the area your recipient is in, how much you send and other factors. You’ll also need to keep track of your own transfers and report them as necessary.

To get a better idea of the services available to get your funds to another country quickly and safely, take a look at our complete guide to international transfer specialists.

Frequently asked questions

• How can I get the best currency exchange rate for Japan?

  Since exchange rates are flexible, it can be difficult to pin down how and when to get the best rate. Transfer services like limit orders can help with this by only sending funds if the exchange rate hits a certain amount or better.

  To find out more about the currency exchange rate for Japan, take a look at our comprehensive guide.

• What's the penalty rate for filing late in Japan?

  The rates can vary by location and should be discussed with a local tax professional to get a clear picture of what’s applicable to you or your recipient’s situation.

• What forms do I need to report my transfer to the IRS?

  Aside from the Gift (and Generation-Skipping Transfer) Tax Return form, you could also need one of the following:

  • Currency Transaction Report. For when your business sends $10,000 or more in payments over the past year.
  • Foreign Bank and Financial Accounts (FBAR).If you have a foreign account valued at more than $10,000 in the past year.

  Check with a tax expert to find out which forms you need to file and when to avoid missing a step and winding up with penalties.