Japan Seeks Indictment on Stock Options Tax Evasion

Japan's National Tax Administration is seeking a criminal indictment of a former Microsoft executive for failure to report option income. Under Japanese law, individuals working for foreign companies must pay income tax both when they acquire options and when they exercise. Employees of Japanese companies only need to pay income taxes on options whose purchase value is less than 10 million yen (about $80,000). Many Japanese employees are unfamiliar with how to report option income, partly because options were uncommon in Japan until recent changes in the law.