March featured business affairs

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1. Accounting (Negative Bond Yield)

During the Accounting Standards Board of Japan (ASBJ) meeting held on January 26th, 2017, the exposure draft on a tentative solution regarding the discount rate used to measure net defined benefit liabilities when the bond yield is negative has been approved.

Regarding accounting treatments such as net defined benefit liabilities, in cases when the rate of high level safety yields during the expected payment term is less than zero, we need to utilize zero or just utilize the minus yields rate.

The tentative solution will be applicable from the fiscal year ending after March 31st, 2017 to fiscal year ending March 31st, 2018.

2. Tax

According to the 2017 tax reform, the taxable income scope of non-permanent residents (those not having Japanese nationality and who have been residing in Japan for a period of five years or less in the last ten years) for securities transfer, will be changed.

In case that non-permanent resident transferred any of the following securities acquired in the last 10 years, the income from these transferred securities will be excluded from domestic source income for non-permanent residents. Noted that, however, the gains on the sales of securities acquired on or after April 1st, 2017 are subject to taxation as domestic source income if such securities are acquired during the period when a foreign person falls under a non-permanent resident.

The transfer of the following 3 securities will be out of the scope of taxable income.
1.Securities transferred in foreign securities exchanges
2.Securities transferred outside Japan by committed financial instrument business operators
3.Securities saved in overseas account owned by overseas offices of committed financial instrument business operators

However, if income from the above is paid in Japan or remitted to Japan from overseas it will count as taxable income.

The purpose for this change is to roll back the scope change for taxable income due to the tax principle reform for non-permanent residents/foreign corporations from the entire income approach to the attribute income approach.

3. Labor Management(Amendment to the Equal Employment Operation Law: effective from January 2017)

Effective from January 1, 2017, employers are required to take necessary measures to prevent maternity/paternity harassment at the workplace.

Before the amendment, the Equal Employment Operation Law prescribed that “employers must not treat workers unfavorably because they are pregnant, giving birth, or taking childcare or family care leave, etc.” Now the amendment added a new provision; “an employer has an obligation to take necessary measures to prevent harassment of an employee by superiors and coworkers by reason of pregnancy, childbirth, or taking childcare or family care leave, etc.”

This rule also applies to client companies who receive worker dispatching services. The law newly provides that “a Client must not treat a dispatched worker unfavorably for reasons relating to pregnancy, childbirth or childcare leave, etc. as provided by Ordinance of the Ministry of Health, Labor and Welfare.”(Source: The Ministry of Health, Labor and Welfare website, “For securing Equal Opportunities and Treatment between Men and Women in Employment”)

4. This Week’s Words of Wisdom

Split the knot.
(René Descartes, Yu Sato “Wise words moving me /”Jibun wo Ugokasu Meigen”)

Currently, the place selection for the Tokyo Olympic golf tournament has become a hot topic.Since the facility of Wakasa Golf Links is not appropriate, Kasumigaseki Country Club was selected for the Tokyo Olympic golf tournament a few years ago.

However, Wakasa Golf Links has re-entered the selection process since women cannot be official members in Kasumigaseki Country Club and this is inappropriate for the Olympics. Simply considering, it is impossible to select Wakasa Golf Links due to consideration that Kasumigaseki Country Club is inappropriate. We need a discussion whether the Olympics is applicable for Tokyo Olympic golf tournament or not.

If it is applicable, it is necessary to request Kasumigaseki Country Club to change their rules. If Kasumigaseki Country Club refuses the rule changes, we need to consider another golf course. Actually, we can choose the candidates when the Olympic committee chose Kasumigaseki Country Club. Therefore, there is no way to reconsider Wakasa Golf Links unless Wakasa Golf Links was a candidate.

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

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