On March 30, 2012 the Japan Diet approved the 2012 Tax Reform Bill. The prominent tax law changes contained in this reform, while not unexpected, do not provide any meaningful tax relief for individual taxpayers. On the contrary, high-earners can expect to pay more taxes and permanent resident taxpayers with significant offshore assets will be subjected to new disclosure requirements. This disclosure is similar to recent US initiatives, including noncompliance penalties, and will likely impact a number of long-term expatriate residents in Japan.
Although the bill is effective from April 1, 2012, the changes to individual income taxation will not begin until tax year 2013 (with the exception of the offshore equity reporting rule - effective from tax year 2012).