1. Accounting (Unification of depreciation method)
The Government Tax Commission discussed a depreciation scheme in a discussion group for corporate taxation. The current scheme allows for a choice between a straight line method or a declining balance method from the view of tax economy in each profit/loss status.
The discussion group mentioned that such flexibility of the choice of depreciation method may result in more advantageous treatment to obtain tax benefits. Internally, it seemed as if almost all members of the group were in agreement that the depreciation methods should be unified into one; namely, the straight line method. Indeed, reputable companies have recently changed their accounting policies, thrown tax benefits away and selected the straight line method to meet IFRS requirements.(Source:“Keiei Zaimu Magazine” No.3160)
2. Taxation (Revaluation of tax free shopping)
The consumption tax-exempt system for exports will be amended on 1 October 2014. Some items such as foods and beverages will be added to the list of tax free products for international travelers.As a result, if an international traveler follows the specific procedures, the aforementioned products will be exempted from consumption tax.(Source: “Zeimu Tsushin Magazine” No.3309)
3. Labor Management(Individual Inhabitant Tax Annual Renewal）
Whereas national income tax is imposed on income earned during the current year, individual inhabitant tax (local income tax) is imposed on income earned during the previous year and paid over a 12-month period starting from June. Individual inhabitant tax is divided into prefectural tax (“Metropolitan inhabitant tax” for Tokyo) and municipal tax (“Special ward inhabitant tax” for Tokyo’s 23 wards).
For the year 2014, it should be paid to the municipality of an individual’s residence as of January 1st, 2014. If a new employee joined a company in or after January and they wish to continue to pay their inhabitant tax balance from the previous year (2013) via “Special Collection” (payroll deduction) through the new employer but failed to make such a request to the previous employer, they can submit the same request to the municipality through the new employer.However, any amount that is past due cannot be paid via Special Collection. In such cases, an employee needs to submit the payment method change request upon receipt of their next tax bill for “Ordinary Collection” (individual payment)
4. This Week’s Words of Wisdom(Source: 100 words in the world)
“Life can only be understood backwards; but it must be lived forwards.”(Danish philosopher, Soren Aabye Kierkegaard)
With regard to the Abe administration, you must have heard some criticism and have been being anxious how our circumstance is going on. However, it is admirable that encouraging pessimistic people who h ave been in backward-looking for 20 years.
The referring page is Nagamine & Mishima JC Accounting K.K.