The deadline for US tax returns is almost upon us.
When I prepared one of my US client’s Japanese income tax return last month, the couple had chosen a Joint Return in the US.
However, as you know, there is ONLY ONE filing status according to Japanese income tax regulations, which is the separate return.
How much can each person deduct foreign tax credit from their Japanese income tax?
Surprisingly, there are no regulations relating to this in Japanese tax law.
I asked the customer about the proportion of revenue and expenses incurred by each person.
However, we gave up on that eventually because we realized that these were impossible to separate .
I cannot provide all the details here, but I am sure that the return will be acceptable because the Japanese NTA cannot reject it if no specific tax law exists relating to this issue.
I decided to consult a respected tax accountant, and he fully agreed with my opinion.
In my view, this is an important issue, and the Japanese government should discuss how it should be dealt with in the near future.
