1. Accounting(Future of Lease Accounting)
The ASBJ is developing a new accounting standard for leases. The main content is part of an effort to make Japanese standards match international standards. The ASBJ aimed at considering whether all leases should to recognize related assets and liabilities or not. In March 2019, they decided to start the development of the standard for leases that recognize assets and liabilities for all leases, but at this point, they have not set a specific target time for development.
2. Tax(Extension of the correction period for transfer pricing taxation (4))
The outline of Tax Revisions in 2019 was released on December 14th, 2018. Continuing from the previous issue, we would like to share an overview related to international taxation issues.
With the introduction of price adjustment measures for transactions involving hard-to- value intangibles, it is expected to be difficult to apply the measures within the current six years correction period of the transfer price tax system. For this reason, it was decided to extend the revision period of the national tax for transfer pricing taxation system from its current six years to seven years.
It should be noted that the extension of the revision period is not only limited to the price adjustment measures for hard-to-value intangibles. This measure is applied from the fiscal year of corporations starting on or after April 1, 2020.
3. Labor Management (Upper Limit on Overtime Hours 2)
Following the revision of the Labor Standards Act, the form of Notification of Agreement on Overtime Work/Working on Holidays (the so-called “36 Agreement”) was revised effective as of April 2019, and having employees work longer than the overtime hours stipulated in the 36 Agreement is now subject to criminal penalties (there is a 1-year transitional period for small and medium-sized businesses). Naturally, the maximum overtime hours to be agreed between the employees and the employer will be a crucial factor.
Due to this law revision, the upper limit on overtime hours that can be agreed by the 36 Agreement was made clear by law. (Please see our Mail Magazine Vol. 141 for the upper limit on overtime hours.) In addition to the day-to-day monitoring of employees’ working hours, employers are further required to ensure that no employee works hours exceeding the upper limit on a monthly basis, and to give a warning beforehand if necessary.
4. This Month’s Words of Wisdom
This time, there are two maxims about money from representative Japanese companies.
One is from the founder of the Kansai railway group and another is from the founder of a luxury hotel in Tokyo.
A man who cannot do anything because there is no money cannot do anything even if he has money.
(By Ichizo Kobayashi (the founder of Hankyu group))
With one million yen can make one million yen of wisdom, and with 10million yen we can make 10million yen of wisdom.
Begin by saving money first.
(By Yonejiro Otani)
For more details, please refer to Nagamine & Mishima JC Accounting K.K.