Japanese customs officials are stepping up their hunt for gold smugglers. Photo: Wikipedia
crime

Authorities go after gold smugglers as tax hike prompts surge in cases

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War on gold I say, peg you wealth on paper ha ha gold is the go, WAR ON GOLD after 6 years of Abenomics there is gold aplenty. If your a politician.

3 ( +5 / -2 )

gold prices remaining at high levels

Well, it depends how you look at it. Actually, it's not that gold is any more or less expensive, it's that they keep printing more yen, dollars, and so on so that it looks like the gold price is going up. It's a world wide scam.

6 ( +8 / -2 )

I've never had any problems bringing in a few coins with the pocket change in the hand carry.

2 ( +3 / -1 )

I don't get it, why is the tax imposed when Gold is being transported. Should sales tax only be imposed when the Gold changes hands between owners.

The way the law is explained in this article it means that you'd have to pay an 8% tax on your gold watch if you were wearing it on a flight to Japan.

5 ( +7 / -2 )

No asset class has performed better than gold ( and other metals ) since 2002.

0 ( +2 / -2 )

At only 8% tax its not worth smuggling and loosing the lot

0 ( +2 / -2 )

Sounds like there's an issue with taxation, not gold. Laffer curve anybody?

6 ( +7 / -1 )

At only 8% tax its not worth smuggling and loosing the lot

Well, these guys have skin in the game, while we here are just idly speculating. Since they are in fact smuggling to get that 8%, it appears that it is in fact worth it. If it wasn't worth it, they wouldn't be doing it. And that suggests that a lot less than 8% of the shipments are getting caught..

Interesting that Japan is exempting Bitcoin from the consumption tax, but not gold.

3 ( +3 / -0 )

Gold is a commodity, bitcoin is a currency. Different things.

-4 ( +2 / -6 )

They are different, but it's not so simple as that. People in the bitcoin community refer to it as "gold." And most people buying it now are buying it as a way to preserve wealth, or to speculate.

Gold is bought by most people as a way to preserve wealth. Those who buy it as a commodity (like jewelers) are the minority.

And of course, bitcoin doesn't have to be smuggled between countries.

2 ( +2 / -0 )

It doesn't matter what they refer to it as in the community, you can't tax a currency.

-4 ( +0 / -4 )

Except the Japanese government also clearly says Bitcoin is not a currency.

2 ( +2 / -0 )

you can't tax...

The famous last words of every person who was later hit by some new tax which they never imagined to be possible.

6 ( +6 / -0 )

It's possible to bring in a kilo of gold without duty into Japan-in fact that is how I make some extra cash by buying in a tax free country and selling it here...

3 ( +4 / -1 )

 I don't get it, why is the tax imposed when Gold is being transported. Should sales tax only be imposed when the Gold changes hands between owners.

BB, ALL imports into Japan get assessed 8% Import Consumption Tax(ICT) + Duty if applicable.

Travelers can bring a bit of booze, cigs & omiyage duty/tax free everything else gets hit at minimum the 8%  ICT & possible duty

1 ( +2 / -1 )

In this day and age it would make more sense to simply transfer your funds with Bitcoin rather than attempt smuggling. Or you could simply send an international transfer to yourself. Not sure why people would try to import a taxable good unless the source of that good (or the purchasing of it) was a bit "grey".

-1 ( +1 / -2 )

Japan inc. is full of old people with no resources. The oldsters are thinking just tax everything for a few more years then let the younger generations sort through the mess we made for them.

3 ( +3 / -0 )

There is no duty on Gold, but the sales tax is being imposed merely on importation.

Another thing I don't understand, the article says that Gold dealers buy the smuggled Gold at prices which include the tax.

In Japan, the consumption tax, currently at 8 percent, is levied on gold when imported. But perpetrators try to evade the tax and sell smuggled gold at shops that will buy it a price that includes the tax.

Why would they do that ? When they sell the Gold they have to apply the tax again and pay that money to the government.

Somebody please explain.

1 ( +1 / -0 )

I am guessing that they would get a refund on that consumption tax if they take the gold back out of the country. The tax is paid at the port of entry on the assumption that they will sell the gold.

1 ( +2 / -1 )

Why would they do that ? When they sell the Gold they have to apply the tax again and pay that money to the government.

Not necessarily. Only businesses registered to collect consumption tax would have to charge future customers when they sell it. This is why the government insists on collecting the tax on everything at the first stage of the value-added chain (importation). Those businesses who are registered for consumption tax aren't bothered to pay because they will get a tax credit or even a refund at the end of the reporting period. It's a bit complicated for non-accountants but trust me, the system works and it's well thought out.

If the government charged consumption tax only on goods imported for personal use but didn't do so on goods intended for commercial resale, people could abuse the system by setting up a small business and importing LV handbags, and other luxury goods claiming it was stock to be resold in their business and not for personal use. The business would then close and stock could be sold off to the business owner for 1 yen.

0 ( +0 / -0 )

This is why the government insists on collecting the tax on everything at the first stage of the value-added chain (importation). 

Yes, it's called protectionism and to make it as simple as possible that is why in your home country your favorite body lotion is maybe 10.00 U.S. and in Japan the exact same thing will cost you triple that.

-1 ( +0 / -1 )

The crims involved here are aiming to pocket the 8% equivalent consumption tax when they sell the gold to domestic dealers. They don't need to pay that 8% when purchasing the gold abroad - their risks are the market risk (gold price might sink before they sell it) and the risk of getting busted by the authorities .

Note that the same scheme can be used by all of us, completely legally, when the consumption tax is next raised. That is, we would buy gold while the tax rate is 8% and sell it after it goes up to 10%, aiming to keep the 2% differential for ourselves. The risk we face is the risk that market value drops wiping out the 2% gain, and also transaction fees for purchase and sale.

This problem for customs won't go away when the rate goes up to 10%, it'll only boost the incentives even more.

Not sure trying to stop this should actually be a government priority myself.

1 ( +1 / -0 )

Not sure trying to stop this should actually be a government priority myself.

Considering the government keeps all the gold they can seize, I bet this will continue to be a priority.

0 ( +0 / -0 )

bitcoin is a currency

haha yeah ok

0 ( +0 / -0 )

I still don't get it.

I thought sales tax was only applied when a good is sold, not when it is transported.

So if I kept a Gold coin in my pocket worth $1000 and I made 10 trips in and out of Japan during the year with the coin in my pocket I'd have to pay a tax of $800 (8% $1000 10 cases of importation)?

0 ( +0 / -0 )

Apparently they are all in on the scam, (according to a recent J TV documentary), including the shops, and the same gold goes round and round, HK, SK, Japan and back round again. Each trip if they don't get caught will net the smugglers an average of 8 million JPY, and it is the taxpayers here who are subsidizing the traffic. The fines, IF you get caught in the very lax net are laughable compared to drugs, people smuggling, etc. (The big gold heist in Fukuoka recently was an ambush on one of the weak points in the perpetual-motion process.)

0 ( +0 / -0 )

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