Maezawa from the Corporate Planning Office here as well.
> Is it correct to understand that the money I transfer would be subject to gift tax rather than income tax?
If you give it as an individual, it would be subject to gift tax. If you give it through a company you own, it would be subject to income tax.
> What happens if money is transferred from my parents? Would it count toward the ¥1.1 million limit?
It depends on the purpose.
If it falls under “property acquired through gifts between people with mutual support obligations, intended for normally necessary living or educational expenses,” then it is not included.
The National Tax Agency’s Tax Answer pages should also explain that things such as childbirth and marriage expenses are excluded, as well as the conditions under which payments are included. If something isn’t covered there, you can contact them directly and ask.
That said, something occurred to me—
When it comes to taxes, you should really ask a tax professional. I’m answering based on the extent of my own knowledge, but I may be mistaken.
Legal interpretation can vary, and such matters are often disputed in court.
One case that comes to mind—not particularly recent, though—involved how winnings from horse-race betting should be taxed.
[Outline of the case]
A 41-year-old former company employee in Osaka used horse-racing prediction software and earned approximately ¥3.01 billion in payouts over the five years from 2005 to 2009, without reporting the income. In 2011, the Osaka District Court indicted him without detention for violating the Income Tax Act, alleging tax evasion of ¥570 million.
The defendant had spent approximately ¥2.87 billion on betting tickets, leaving him with a profit of ¥155 million.
In other words, although he earned ¥3 billion, ¥2.87 billion had disappeared into the cost of purchasing betting tickets. However, because horse-racing payouts were treated as occasional income, he was effectively told to pay ¥570 million in taxes on earnings of ¥155 million.
Under normal business operations, the cost of purchasing betting tickets would be treated as an expense, so it would naturally make sense to tax only the ¥155 million. But because horse racing was viewed as gambling, a different approach was taken.
However, the Supreme Court’s ruling on December 15, 2017, stated that the payouts in this case constituted miscellaneous income, based on the manner in which the betting tickets were purchased and how the profits arose, and that the cost of losing tickets qualified as a necessary expense.
That ruling surprised many people.
This is just one example, but legal interpretations can differ. In this case, the way of thinking changed completely before and after the ruling. So if you don’t consult a tax professional, you may end up relying on outdated information or answering without knowing the relevant legal interpretation.
For anything important, be sure to consult a specialist.
Also, I agree that receiving the money in person is preferable to having it transferred.
