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1. Accounting (Research on employee benefit cost)

The research conducted by KEIDANREN (Japan Business Federation) shows that the average Welfare and Benefit cost borne by an employer for an employee from April 2012 to March 2013 was JPY 104,243 per person per month, which was a 0.9% increase over the previous year. Within the cost, “statutory welfare,” or social insurance contributions paid by an employer, was JPY 78,948, a 1.5% increase compared with the previous year, mainly due to the rise of social insurance premiums.

On the other hand, “non-statutory welfare,” or welfare expenditures by an employer outside those mandated by law, was JPY 25,296, a 1.0% decrease over last year, marking a downward trend. In its details, however, the expenses for health support and for subsidizing employees’ activities such as cultural activities, physical activities, recreation, etc. showed an increase. These data indicate that companies tend to focus on supporting employee benefits that are conducive to good health. (Source: “Keiei Zaimu Magazine”)


2. Taxation (Transfers of stock options to the company)

On or after April 1, 2014, when the holder of a non-tax qualified stock option transfers the option back to the issuing company before its exercise, the difference between the market price and exercise price will be treated as earned income that will be taxed at regular progressive rates and the current capital gain treatment that is subject to separate taxation at a flat rate (currently 15% of taxable income) will no longer be applied to the difference.

On a practical level, there is a question as to whether or not the capital gain treatment should be applied to those transfers as described above conducted by March 31, 2014. In an example answer documented by National Tax Agency in Tokyo, a possible earned income tax rate can be applied to the transfer if it was intended as a means of tax-reduction. Practitioners question this stance as it would go against the principle of no taxation without representation. (Source: “Weekly T&A master No.529”)


3. Labor Management(Labor-management Agreement on Overtime Work and Holiday Work (36 Agreement))

Employers are required to conclude a written labor-management agreement and file it with the Labor Standards Inspection Office in order to legally have employees work overtime or on holidays. This agreement is commonly known as “36 Agreement” because it is based on Article 36 of the Labor Standards Act. If an employer has its employees work overtime or on holidays without concluding and filing this 36 Agreement, the responsible party may face up to 6 months of imprisonment or a fine of up to 300,000 yen.

According to a survey, 94% of large companies and 43.4% of small and medium-sized companies were in compliance with 36 Agreement as of April 1, 2013. The main reasons for lack of compliance with the agreement included “there is no overtime or holiday work” (43%), “did not know about 36 Agreement” (35.2%) and “forgot to conclude and file 36 Agreement” (14%), showing its low level of public recognition. (“General Survey Results on Working Hours, etc. 2013” by Ministry of Health, Labour and Welfare)


4. This Week’s Words of Wisdom(Source: 100 words in the world)

“To avoid criticism, do nothing, say nothing, and be nothing.” (Elbert Hubbard, American Writer)

A professor of Tokyo Institute of Technology boldly spoke his opinion on TV that there is no relation between global warming and the concentration of carbon dioxide in the atmosphere. I think his opinion was convincing in its own way. The assertion was that international organizations resolved to reduce CO2 emissions were susceptible to changes in politics. The professor maintained that if data analysis were conducted over the long term, it would show a cooling of the earth. It was added that extreme weather conditions are indicative of colder weather.

Listening to his statements, I found him to be courageous and admirable.

The referring page is Nagamine & Mishima JC Accounting K.K.

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