1. Accounting(Accounting process related to issuing and keeping electronically recorded monetary claims under the Financial Instruments and Exchange Act (“FIEA”) and ICO tokens relevant to crypto assets under the Payment Services Act (“PSA”))
On 29 November 2019, the ASBJ decided to consider accounting treatments related to issuing and keeping electronically recorded monetary claims under FIEA and ICO tokens relevant to crypto assets under the PSA, based on a proposal from the Standards Advisory Council.
On 12 December 2019, the tax reform proposals for 2020 were published. This mail magazine will deliver the overview from this month.
1) Measures to prevent tax avoidance through dividends from subsidiaries and the transfer of shares
When companies receive dividends from their subsidiaries, 50% or more of whose shares are held directly or indirectly by the companies, the book value of the share of the subsidiaries will be reduced if the dividend received exceeds 10% of the book value of the shares for subsidiaries. Then, the reduced value will be equal to the amount excluded from revenue under the exemption system for dividends from foreign subsidiaries (equivalent to 95% of the dividend).
This measure is legislated to prevent the tax avoidance method of creating a loss through the transfer of the shares of a subsidiary after making the subsidiary pay dividends in order to reduce the fair value of the shares of the subsidiary.
The types of dividends which will be excluded from the application of this measure will be delivered in the next mail magazine.
3. Labor Management (Amended Labor Policy General Promotion Act)
The Labor Policy General Promotion Act was amended and employers will be obliged to have work place harassment prevention measures in effect from June 1, 2020. Medium and small businesses will be required to make efforts by March 31, 2022.
According to the guideline proposed by the Ministry of Health, Labor and Welfare, employers are required to take necessary measures so as to obtain better understanding and interest of workers with power harassment issues, and to pay close attention to the behavior of the workers concerned. At the same time, employers themselves must make every effort to obtain better understanding and interest in power harassment issues and be careful of their own behavior and attitude toward workers.
Along with this amendment, the Equal Employment Opportunity Law and the Child Care and Family Care Leave Law will also be amended in order to strengthen measures to prevent sexual harassment, etc.
(Source: Ministry of Health, Labor and Welfare website, 20th Labor Policy Council subcommittee handout 1-1, 1-2)
4. This Month’s Words of Wisdom
National brightness rises in arts.
(Yukichi Fukuzawa/ Educationist)
The term brightness above means the brightness of civilization.
In those days (Approximately 150 years ago), art was a broader concept and it included not only calligraphy and sculpture, but also performance and ‘’Budo’’ (Judo and Karate). The concept extended further to cuisine, and ‘’Go’’ and ‘’Shogi’’ (Japanese chess). Not to mention politics, economics and the military, civilization means the lifestyle and flavors widespread among people.
For more details, please refer to Nagamine & Mishima JC Accounting K.K.