1. Accounting (Accounting for Issuance of ICO Tokens)
In March 2022, “Discussion paper on the accounting for the issuance and holding of ICO tokens that fall under the category of Crypto-assets under the Payment Services Act or the category of electronically recorded transferable rights under the Financial Instruments and Exchange Act” has been released. The paper covers some issues on the accounting for the issuance of ICO tokens. More specifically, it assumes two cases focusing on the practical aspects in issuing ICO tokens where the issuer of ICO tokens bears; 1) none of, and 2) a part of, the obligation that should be borne by the issuer, then gives discussion on accounting treatment in each case.
2. Tax (FY 2021Revision of Income tax and Inhabitant tax – Calculation of Retirement Income)
Tax System Reform Plan for FY2021 has revised the calculation formula to derive the amount of retirement income. In calculating the retirement income of the person who has serviced for five years or less without holding any roles falling under officer (i.e. an officer under the Corporate Tax Act, an assembly member, or a public employee), assuming that the calculated amount exceeds 3 million yen after subtracting the deduction for retirement income from the earnings, the portion of the calculated amount of 3 million yen or less shall be reduced by half, while the other portion of exceeding 3 million yen shall not be reduced by half. This revision will apply to income taxes for FY 2022 and beyond.
3. Labor Management (Raise in Legal Extra Wage Pay Rate – Repealing Exemption to Small and Medium Enterprises)
Currently, the provision stipulating that the extra pay rate of extra wages for overtime work shall be 50% or more for overtime work exceeding 60 hours per month is only applicable to large companies, while small and medium enterprises are exempted. This exemption, however, will be repealed from April 2023, requiring small and medium enterprises to also follow the provision.
The enforcement of the Labor Standards Act revised in 2010 has already raised the legal extra wage pay rate for overtime work exceeding 60 hours per month from “25% or more” to “50% or more” with the intention to suppress long hours of overtime work by imposing an economic burden on employers.
Having exemption repealed, small and medium enterprises will also need to revise their work rules to include a clause on two items, i.e. the extra pay rate for overtime work exceeding 60 hours per month and the initial calculation date for one month to compute such extra pay, as these items fall under the matters required to be set forth in work rules.
(Source: Ministry of Health, Labour and Welfare – Outline of Related Laws and Regulations on Working-Style Reforms based on the Revised Labor Standards Act)
For more details, please refer to Nagamine & Mishima JC Accounting K.K.