What is overseas forex cashback? A complete guide to choosing a cashback site, its drawbacks, taxes, and more - Money Charger, your overseas forex cashback service

If you're going to trade forex overseas, definitely lose money if you don't take advantage of cashback offers . However, many people probably have questions like the following:

What exactly is cashback?
What should I do to get the best deal?
Are there taxes on profits earned through cashback?

This article addresses these questions and explains key points and precautions to consider when choosing a website. It's written in an easy-to-understand way, even for beginners, so please use it as a reference !

Contents

1 Advantages & Disadvantages of Overseas Forex Cashback Sites / How to Choose One
2 summary

Advantages & Disadvantages of Overseas Forex Cashback Sites / How to Choose One

In simple terms, overseas forex cashback is a service that gives money back to users

You can receive money when opening an account or making a deposit, depending on the volume of your trades

There are two types of cashback available:

Direct cashback: A bonus unique to overseas forex brokers
Indirect cashback: Bonuses from cashback websites (companies that specialize solely in cashback)

The former involves receiving money not as cash, but as margin for trading, and includes account opening bonuses and deposit bonuses

The latter involves direct cash deposit into your account. All cashback programs offered by cashback websites fall under this category of "indirect cashback."

What are overseas forex cashback sites?

A "cashback site" is, simply put, like an agent for overseas forex brokers . When you open an account through the site, the overseas forex broker pays the cashback site a referral fee.

Based on the trading volume of site users, cashback sites receive money from overseas forex brokers each time. A portion of this money is then returned to site users as a bonus. This cashback can be received for every trade.

To get the best deal possible, it's essential to have a good understanding of cashback programs

It's enough to understand that using cashback reduces fees. Those familiar with overseas forex trading can easily understand this by thinking of it in terms of spreads, as shown below

Example: If you can receive a $3 cashback for every lot (100,000 units of currency) traded

You can receive $3 in cash for each lot traded

If the spread is 1.0 pip, then 0.3 pips will be returned for every $3 traded

The reduced amount allows the spread to be (1.0 - 0.3) pips, effectively reducing the spread to 0.7 pips

cashback can effectively narrow the spread .

Why do they offer cashback?

Why do overseas forex brokers offer cashback to their users? At first glance, it might seem like they're just handing out money. However, by implementing a cashback system, both the broker and the user actually create a win-win situation

In short, overseas forex brokers make money from the fees charged for each trade. The more users they have, the greater the total trading volume, and the more fees the brokers can collect from their users

It's safe to assume that brokers offer cashback to attract more users. They're happy if giving back to users, even a little, encourages more people to try FX trading

You might feel suspicious about getting paid just for making a transaction, but the businesses are doing it to make a profit, so please use their services with peace of mind

Profits earned through cashback are subject to tax (a tax return must be filed)

Cashback is a great service that gives you money back for every transaction, but if I had to point out a downside, it the money you earn is subject to taxes .

Bonuses received from cashback sites are deposited directly into your account as cash. Since you can withdraw the deposited money from your account as cash, the money received considered profit earned from FX trading .

As a result, any profits earned through cashback must be included in your tax return. Note that, like profits from FX trading, it is treated as taxable income

Profits earned from overseas forex trading (including cashback) are subject to comprehensive taxation as miscellaneous income

The tax rate for comprehensive income is determined by a progressive tax system (seven brackets ranging from 4% to 45%). The more profit you make, the higher your taxes will be, so be sure to carefully check your own profits

On the other hand , bonuses offered by FX brokers are generally not subject to taxation. This is because they are distributed as margin or points, not actual cash.

✓ Also frequently read

Are cashback rewards from overseas forex trading taxable? Regarding the necessity of filing a tax return

Cashback bonuses are given for every trade. While it's common for withdrawable bonuses to be taxable, what about the tax system for cashback bonuses? In conclusion, cashback bonuses are taxable. Therefore, like profits earned from trading, you need to file a tax return. This article will explain in detail about taxes and tax returns for overseas forex trading. However, be aware that tax systems differ depending on the country you live in and whether the forex is domestic or international. Taxes and tax returns on cashback in overseas forex trading We will introduce the taxes on cashback. Cashback is taxable However, this may differ depending on your place of residence Unrealized losses and unrealized gains are not taxable Profits are treated as miscellaneous income Losses cannot be carried forward Let's look at each point in detail. Cashback is taxable Cashback is money returned in overseas forex trading according to the trading volume. This is treated the same as regular cash and is therefore taxable. For example, let's say you receive a cashback of 500 yen for every lot (100,000 currency units) traded. And let's say you trade 100 lots and make a profit of 100,000 yen. If there is no cashback, the profit of 100,000 yen will be taxed as is, but if there is cashback, the tax will be 100,000 yen + 50,000 yen = 150,000 yen. This is because such cashback can be withdrawn and is considered profit just like cash, so it is subject to taxation. When filing your tax return, do not separate cashback from simple profit, but calculate everything as profit. However, tax laws differ depending on your place of residence. If you live in Japan, all profits from overseas FX, including cashback, are subject to taxation. However, if your place of residence is different, it may be tax-exempt, so be careful. In low-tax regions known as tax havens, such as Singapore and Hong Kong, you can pay significantly less in taxes than in Japan. This is one reason why investors who make large profits reside overseas. Calculate profits earned from January 1st to December 31st. When filing your tax return, you calculate and declare profits (including cashback) earned from January 1st to December 31st. The filing period is from around February 15th to around March 15th of the following year. The filing period may vary slightly from year to year, so be sure to check each time. If you fail to file a tax return despite being taxable, you may be considered to have evaded taxes and face heavy penalties. Make sure to file your tax return correctly and avoid any omissions. You can print the tax return form from the National Tax Agency's website. There are no specific documents required to prove profits from overseas FX trading. Calculate your profits and losses using the transaction history sent by your FX broker. You can print the tax return form from the National Tax Agency's website. It contains detailed information on the necessary input fields, so it's a good idea to review it before creating your tax return. Unrealized gains and losses are not taxable. In FX trading, only profits realized between January 1st and December 31st are taxable. Unrealized gains and losses are not included. Therefore, even if you have realized profits of +1 million yen and unrealized losses of -2 million yen as of December 31st, taxes will only be levied on the realized profit of 1 million yen. If your confirmed losses reach -5 million yen after January 1st of the following year, you could end up in a situation where you have to pay taxes but have no funds on hand, so be careful. Note that taxes are levied regardless of whether you withdraw the money or not, so even if the money remains in your overseas FX account, you will be taxed. Profits from overseas FX are classified as miscellaneous income when filing your tax return. Remember that a 5-45% income tax rate (comprehensive tax rate) is levied on profits. If your profits are small, you will pay less tax, but if you make a lot of profit, you will pay a lot of tax. The following people are subject to filing a tax return for overseas FX: Salaried employees - Company employees, part-time workers, etc. - If you make more than 200,000 yen in profits in a year, you are required to file a tax return. Non-salaried employees - Self-employed, housewives, students, people with no income, etc. - If the sum of your annual income and FX profits exceeds 480,000 yen, you are required to file a tax return. The amount of profit that requires filing a tax return differs between salaried employees such as company employees and part-time workers and non-salaried employees such as the self-employed and students. Other miscellaneous income includes profits from side businesses such as affiliate marketing and cryptocurrency, so be sure to add everything up when calculating. If your salary income is low, you may not need to file a tax return. If your annual income does not meet the threshold, you may not be required to file a tax return. For example, if your annual salary from a part-time job is 700,000 yen, you can receive a maximum deduction of 1,030,000 yen, consisting of a 550,000 yen salary income deduction and a 480,000 yen basic deduction. Since there is a remaining 330,000 yen in deductions, you do not need to file a tax return if your profit (miscellaneous income) is 330,000 yen or less. However, if you want to gain experience filing a tax return, you can do so as practice. Of course, you will not have to pay taxes, so don't worry. <A withholding tax slip is required when salary earners file a tax return> If you are a company employee, part-timer, or have a side job and earn salary income, you will need a withholding tax slip when filing a tax return. Company employees usually receive one, but part-timers and side workers may need to request one from their employer, so be careful. New employees who have worked as part-timers may need to request one from their previous employer, not their new employer. Be careful with overseas forex trading, as losses cannot be carried forward. The tax systems for domestic and overseas forex trading differ. If you are already using domestic forex trading, it is a good idea to check the differences in the rules for filing tax returns. The biggest difference in the rules is "how long losses can be carried forward." With domestic forex trading, losses can be carried forward for up to 3 years, but with overseas forex trading, losses cannot be carried forward. For example, let's say you lost 1 million yen in the first year and made a profit of 400,000 yen in the second year. Since you lost 1 million yen in the first year, the profit/loss in the second year will be -600,000 yen. If you were using a domestic forex broker, you would not have to pay income tax because it is a loss. However, with overseas forex trading, losses cannot be carried forward, so you will need to file a tax return on the 400,000 yen profit. Therefore, if you are making a profit using overseas forex trading, you should file a tax return every year. Tax rates also differ between domestic and overseas forex trading. As already mentioned, the tax rate for overseas forex trading is 5-45%. However, domestic FX is subject to taxation based on self-assessment, so the tax rate is fixed at 20.315%. Domestic FX vs. Overseas FX: Tax System, Self-Assessment Taxation, Comprehensive Taxation, Tax Rate: 20.315%, 5-45%, Loss Carryforward: Up to 3 years…

It's important to choose an overseas forex broker that you want to use for trading

Avoid choosing an overseas forex broker based solely on cashback offers. Even if a site offers seemingly good cashback rates, its spreads may be wider than those of other companies.

You should choose a cashback site following these steps:

Choose the service provider you want to use
Choose a cashback site that handles your chosen overseas forex broker
Compare them based on the cashback rate and narrow it down to one

The most important thing is to avoid losses in trading. Don't be fooled by temporary campaigns or high cashback rates offered by FX brokers

It's important to choose a cashback site based on the overseas forex broker you want to use, or one you trust

Even if you are already registered with an overseas forex broker, you can open an additional account

If a broker allows you to open multiple accounts, you can open a new account with the same broker through a cashback website. (You can open an additional account even if you already have one with that broker.)

Some brokers (such as iFOREX) only allow you to open one account, so if you're just starting out with FX, we recommend checking the following two points before opening an account

Number of accounts that can be opened
Partner cashback sites

Be aware that some companies may not even allow account opening through cashback websites

Money Charger (Manecha) partners with popular businesses

MoneyChat partners with popular overseas forex brokers among Japanese users. All partners offer Japanese language support, so you can use them with peace of mind. The following four companies are partnered with MoneyChat:

Gemforex
FXGT
IS6FX
FXBeyond

The cashback rates offered by MoneyChat at the four companies mentioned above are considerably higher than those of other cashback websites

*IS6FX has relatively few Japanese users and can be considered suitable for intermediate to advanced FX traders

Also, be sure to check if there is any direct cashback offer

Bonuses offered independently by overseas forex brokers = direct cashback
Bonuses from cashback sites = indirect cashback

In most cases, it is not possible to receive both of the above simultaneously

Therefore, we recommend that you first check directly whether or not a cashback offer is available

If you want to open an account with an overseas forex broker that doesn't offer direct cashback, we recommend opening the account through a cashback website

Overseas forex brokers that offer direct cashback	・GemForex ・Hotforex ・XM ・LAND-FX ・iFOREX ・FBS
Overseas forex brokers that do not offer direct cashback	・Tradeview ・Axiory ・FxPro ・TitanFX

Comparison of overseas forex cashback sites

We've compiled a list of six reputable cashback sites for overseas forex trading from the many available options

All of these services are safe to use, making them especially recommended for those who have no prior account opening experience or trading history

	Year of establishment	Ease of use	Recommendation level
① Money Charger	2013	◎	◎
②FXRoyalCashBack	2013	〇	〇
③ TariTari	2012	◎	〇
④ Final Cash Back	2013	◎	△
⑤ CASHBACK-Victory	2014	◎	△

Some websites may be running their own unique campaigns

particularly characterized by its high cashback rates for popular FX brokers such as Gemforex and FXGT .

Since the ease of use doesn't vary much, it's best to choose based on the campaigns offered by each cashback site

■Do Money Charger's (Manecha) four partner companies offer direct cashback?

The cashback offers from Moneycha's four partner companies are as follows:

gem forex	Account opening bonus: 20,000 yen Deposit bonus: 100% up to 1 million yen ▶ What is GEMFOREX? A thorough explanation of its reputation, deposit and account opening bonuses, deposit and withdrawal methods, and more!
IS6FX	Account opening bonus: 20,000 yen Deposit bonus: 100% up to 1 million yen Currently ended ▶ What is IS6FX? A thorough explanation of its reputation, deposit & account opening bonuses, deposit and withdrawal methods, and more!
FXGT	Account opening bonus: 5,000 yen Deposit bonus: 120% up to 70,000 yen Subsequent deposits are 30% ▶ What is FXGT? A thorough explanation of its reputation, deposit and account opening bonuses, deposit and withdrawal methods, and more!
FXBeyond	Account opening bonus: None Deposit bonus: 100% up to 5 million yen ▶ What is FX Fair? A thorough explanation of its reputation, deposit and account opening bonuses, deposit and withdrawal methods, and more!

However, direct cashback offers are often limited-time campaigns, so if you're interested in a particular company, we recommend regularly visiting their official website to check for updates

Choose a trustworthy cashback site

The following three points are key when choosing an FX cashback site:

Reliability
Whether they are partnered with the FX broker I want to use
Cashback rate

Of these factors, reliability should be given particular importance. Some cashback companies engage in unethical practices, such as falsifying the amount of cashback or simply taking personal information without actually providing the cashback

especially cautious of companies that do not possess a financial license or that do not list their company address .

The number of brokers is an important factor to consider, but first, check whether the broker you want to use is affiliated with them. A large number of brokers doesn't necessarily mean a good broker. It's enough to think of it as simply "more brokers = more options to choose from."

While a higher cashback rate is always preferable, it's important to be aware that the trading fees of the partner FX brokers may be high

Please use Money Charger (Manecha) with confidence

Our company primarily operates in the Asian region (Singapore, Vietnam, Taiwan, Japan, mainland China, Hong Kong, South Korea, etc.)

Our track record of referring clients to brokers is among the best in the industry, exceeding a total of US$100 million (approximately 11.5 billion yen) in seven years

We also provide comprehensive support for broker operations, including strategic planning and marketing consulting during the initial setup of a brokerage, as well as development of core systems

Manecha has strong connections with brokers, which allows them to offer services under favorable conditions

summary

There are many overseas forex brokers and websites that offer cashback, but there are also many things you should know. Let's review the important points once again

It's a good idea to use cashback offers to gain an advantage in trading
There are two types of cashback offers for overseas forex trading: bonuses offered by the forex broker itself (direct cashback) and bonuses offered by cashback websites (indirect cashback)
Direct and indirect cashback cannot be received simultaneously
When choosing a cashback site, it's important to prioritize reliability
Even with cashback, profits received in cash are subject to tax

Select the information you need and find the company that best suits your needs!

What is cashback on overseas forex trading? A complete guide to choosing a cashback site, its drawbacks, taxes, and more