1. Accounting(Public announcement of an amendment to “Japan’s modified international standards”)
The ASBJ implemented the endorsement procedure on accounting standards announced by the IASB and released the Japan’s Modified International Standards (JMIS).
This was issued as a result of the implementation for reforms on IFRS 9 (issued in 2014) within the standards announced as of 30 June 2017 and others which become effective after 1 January 2018 (excluding IFRS 16 “Lease” and IFRS 17 “Insurance Contracts”)
This amendment reforms the following modified international standards.
I. “Application of JMIS”
II. “ASBJ Modification Accounting Standard No.1 (Accounting for Goodwill)”
III. “ASBJ Modification Accounting Standard No.2 (Accounting for Other Comprehensive Income)”
2. Tax(FY2018 Japan tax reform outline (5))
Under the rules for Japanese controlled foreign companies, a foreign subsidiary is defined as a “Financial CFC” when conducts banking or insurance business in line with the law on jurisdiction where its head office is located and when its directors or employees are engaged in all of the tasks normally necessary to conduct such business properly. If a company qualifies as a financial CFC, this slightly reduces the applicable scope of the CFC rules, e.g. it confines taxable income to specified income of the partial inclusion income.
By FY2018 Japan tax reform, in cases when insurance underwriting subsidiaries and managing agency subsidiaries are established in the Lloyd’s UK market in accordance with the local laws and act as a unit to operate insurance business, these subsidiaries, as a unit, undergo the judgement of criteria to be qualified as Financial CFCs.
The same applies to cases where insurance contractors and underwriters are separately incorporated and act as a unit to operate insurance business in accordance with the local laws in other markets. (to be continued)
This reform is applicable for each fiscal year beginning from 1 April, 2018.
3. Labor Management (Notification of status of foreign workers)
This year, in accordance with the Ordinance for Enforcement of the amended Employment Measures Act, the Notification of status of foreign workers was revised to have the names of foreign workers written in Roman Alphabets corresponding to their Resident Cards.
Based on the Employment Measures Act (2007), all employers are required to, upon hiring foreign workers or at the time of their resignation, confirm and notify the name, status of residence, and period of stay of each worker to Hello Work by submitting this notification.
Any employer failing to comply with this rule shall be liable to a fine of not more than 300,000 yen.
Employers are required to check if an employee has a status of residence which grants them permission to work. Those who do not have the eligible status of residence cannot work unless they obtain permission to change their status of residence at a regional immigration bureau.(Source: Website of Ministry of Health, Labor and Welfare)
4. This Month’s Words of Wisdom
Being asked, “What is it that soon grows old?” Aristotle answered, “Gratitude.”
(Lives and Opinions of Eminent Philosophers)
Paradoxically construed, it means that I should “Keep reminding myself to show gratitude to people around me”, doesn’t it?
For more details, please refer to Nagamine & Mishima JC Accounting K.K.