Many people have misconceptions and concerns about the My Number Card, especially those concerned about the risk of additional tax charges. This blog aims to clarify how the My Number Card affects your tax affairs and allay your concerns.
What is a My Number Card?
My number cards are used to identify individuals and were introduced to simplify various official procedures. However, this card does not directly lead to an increase in taxes.
It is only a tool to organize information.
Information that the My Number Card has
Some people may carry their My Number Card with them regularly. It replaces your insurance card, which means you take it with you. If you do so, you may lose it if you lose your wallet or card case. At this time, you may worry that you may lose your My Number card, and someone may misuse it.
You may think that no matter how convenient it is, you may not want a My Number Card if it increases the possibility of losing your essential information daily.
However, your personal information is unlikely to be leaked and misused due to loss. This is because most of the information on the My Number Card is written on the card’s surface.
The other information is contained in the IC chip. You may feel that this has some critical information. However, there are four types of information contained in the IC chip.
Information in the IC chip
- JPKI-AP: An application that proves that there is no impersonation or data improvement in online identity verification or compulsory procedures
- Ticket Verification AP: An application to check whether the My Number Card has been forged or tampered with.
- Ticket entry assistance AP: Application to use text data of personal numbers and basic four information in the procedure.
- Juki AP: An application to use text data of resident registration codes for Juki Net-related paperwork.
Will the tax office know the information?
A common concern is that having a My Number card will reveal personal financial information to the tax office. However, the My Number Card itself does not provide tax information.
The My Number Card does not contain tax information or income information.
Links can be made. My number card may be linked to some information through the savings account and public money-receiving account registration system, mainly to simplify the receipt of benefits. Just because your My Number Card is linked to your account does not mean that taxes can be withdrawn without your permission.
Risk of loss
Loss of the My Number Card is a cause for concern, but the card contains only limited information, and essential data is protected in the IC chip. Even in the event of loss, the risk can be minimized by changing the password or notifying the police.
However, since it does contain personal information, it must be adequately managed. For example, obtaining a copy of the family register or certificate of residence at a convenience store is possible with My Number card and its password. Family structure, date of birth, etc., can be omitted. In this sense, you need to manage them well.
However, it is impossible to open a bank account without permission using someone else’s credit card number. It is vital to balance convenience and risk.
Advantages of My Number Card
My number card facilitates official procedures and makes it easier to obtain necessary documents. This saves time and effort when filing tax returns, for example, and makes various applications easier, thus increasing convenience in daily life.
For business people, simply having a My Number card reduces the need to go to the counter and apply for detailed information in many places. In terms of tax payment, the use of the My Number Card enables electronic tax payment. This eliminates the need to go to the counter to get documents or to send them by mail.
Risk of additional tax collection
Having a My Number Card does not increase the risk of additional tax collection.
Tax audits are conducted by laws and regulations, and the tax office will investigate as necessary, regardless of whether or not you have a My Number card. The risk of having one’s side business exposed and the ease of ascertaining overseas assets are not due to the My Number card itself but are within the normal scope of the tax office’s investigation.
The risk of your side job being discovered depends on the method of filing your inhabitant tax return. If you leave all of your residential tax reporting to the company you work for, your income from side jobs will be added up and reported to the company. Your company knows the general inhabitant tax rules for working for your own company. For example, let’s say that the amount is 400,000 yen. However, the municipality’s inhabitant tax bill states that the amount is 600,000 yen. In this case, the company will always check where the 200,000 yen came from. The company is concerned that it may have miscalculated the amount.
As a result, it will be determined that the 200,000 yen came from income other than the company’s. This is how the side job is revealed. But again, you will not be found out because you have your My Number Card.
Relationship between outward remittance of assets and my number card
If you have large assets abroad, you must submit a foreign assets report to the tax office if you have assets over a certain amount. In this case, they must include their number, which is based on the existing international Common Reporting Standard (CRS), and the My Number card itself does not create any new risks.
The CRS is a mechanism for countries that are members of the OECD to share information. Financial institutions share that information, so even if that bank account is not linked to the My Number Card, the account information will be securely tracked.
Conclusion.
My number card does not directly impact tax management. It is an essential tool that improves the convenience of public procedures.
Let us use this card without feeling uneasy. Even if you do not have a My Number card, you will still have a My Number assigned to you as an individual. Having or not having a My Number card carries the risk of losing it.
Let’s understand the risk well and lead a more efficient daily life.
