September featured business affairs

1. Accounting(Various standard revisions by publication of accounting standards about the calculation of market prices)

In Japan, detailed guidance on calculation methods have not been set up so far, but almost the same contents as the Accounting standard on fair value measurement set out by International Accounting Standards Board (IASB).
In order to improve on the comparability with the provisions of these international accounting standards, the Accounting Standard No. 30, “Accounting Standards for Fair Value Measurement,” was issued in June 2019 so please be aware that the following Accounting Standards and Guidance on Accounting Standard will be revised.

・Revised Accounting Standard No. 9 “Accounting Standard for Measurement of Inventories”
・Revised Accounting Standard No. 10 “Accounting Standard for Financial Instruments”
・Guidance No. 31 “Guidance on Accounting Standard for Fair Value Measurement”
・Revised Guidance No. 14 “Guidance on Accounting Standard for Quarterly Financial Statements”
・Revised Guidance No. 19 “Guidance on Disclosure of the Fair Value, etc. of Financial Instruments”

2. Tax(No. 8: Exception of taxation of foreign corporations performing duties in Tokyo Olympics and Tokyo Paralympics)

The outline of Tax Revisions for 2019 was released on December 14th, 2018. Continuing from the previous issue, we would like to share an overview related to international taxation issues.

It was decided that tax exemption measures would be set for the domestic incomes of certain foreign corporations related to the holding of the Games of the XXXII Olympic Games 2020 or the Tokyo 2020 Paralympic Games (hereinafter collectively referred to as “the Games”).

Specifically, domestic incomes earned by the following foreign corporations in each fiscal year starting between April 1, 2019 and December 31, 2020 (limited to those attributable to permanent establishments in Japan) are exempted from corporate tax.

1)The International Olympic Committee (IOC) and certain foreign corporations engaged in events related to the Tokyo Olympics, 100% of whose share the IOC owns: operations related to the Games of the XXXII Olympic Games 2020

2)International Paralympic Committee (IPC): operations related to the Tokyo Paralympic Games

3)Foreign corporations producing audio or video related to the tournaments that have special relationships with the IOC through holding shares: Tournament related operations carried out by each of the above foreign corporations

4)Foreign time-keeping or dispute mediating companies that are involved in Olympic events: Tournament related operations which are carried out by each of the above foreign corporations

5)Foreign corporations that dispatch and support teams of athletes and referees or foreign corporations that have the right to broadcast the tournament based on their contracts with the IOC or IPC: Tournament related operations which are carried out by each of the above foreign corporations

6)Other corporations designated by the Minister of Education, Culture, Sports, Science and Technology: Tournament related operations carried out by each of the above foreign corporations

“Tournament related operations” means operations concerning smooth preparation and administration of the Games.

3. Labor Management (Realization of “Equal Pay for Equal Work”)

For the realization of “Equal Pay for Equal Work” under the work style reforms, the Japanese government established policy guidelines and published checking/consideration manuals to support employers’ efforts. This can be a roadmap to the elimination of disparities in treatment between regular and non-regular employees.
However, employers are still facing many challenges that need to be solved before the enforcement of the “Part-Time/Fixed-Term Employment Act” in April 2020 (or 2021 for small and medium-sized businesses), such as consideration on improvement plans which apply to various working styles of individual workers, clarification of the definition of unreasonable disparities in treatment, etc.
The government needs to further enhance the support for employers and update the manuals on an as needed basis, based on practical needs. (Source: The Ministry of Health, Labor and Welfare, “Equal Pay for Equal Work – Ensuring fair treatment irrespective of employment types -”)

4.  This Month’s Words of Wisdom

There is only one truly important freedom – financial freedom

(William Somerset Maugham)

If you rewrite it to “Even if you have financial freedom, you do not know if your mental satisfaction will be fulfilled” it becomes what I really feel.

For more details, please refer to Nagamine & Mishima JC Accounting K.K.

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