1. Accounting (Quarterly Disclosures)
The Subcommittee on corporate accounting under the Liberal Democratic Party’s Research Commission on finance has formed a consensus on quarterly disclosures as to integrate the quarterly reports into the brief report of quarterly financial results, citing the fact that discussions at the Working Group on Corporate Disclosure under Financial Services Agency have made some progress.
Accordingly, the Subcommittee are discussed on mainly quarterly disclosures, particularly how to perform the review on it, once quarterly disclosures have been integrated into the brief report of quarterly financial results. As the proposals made by the Financial Services Agency do not consider that the review on quarterly financial results is not required but is voluntarily performed after integrating quarterly disclosures and with a new column inserted in the brief report specifying whether or not the reviews are made.
2. Tax (Protocol Amending the Tax Convention Japan-Switzerland -1: Application start timing)
On November 1, 2022, the Ministry of Finance (Japan) announced that mutual notifications between the Government of Japan and the Swiss Federal Council necessary for the entry into force of the “Protocol Amending the Convention between Japan and Switzerland for the Avoidance of Double Taxation with respect to Taxes on Income” (signed on July 16, 2021) were completed on October 31, 2022. Accordingly, this protocol entered into force on November 30, 2022 , the thirtieth day after the date of completion of the mutual notifications, and now has effect:
（１） in Japan
a) with respect to taxes levied on the basis of a taxable year, for taxes for any taxable years beginning on or after January 1, 2023;
b) with respect to taxes levied not on the basis of a taxable year, for taxes levied on or after January 1, 2023;
（２） in Switzerland
a) with respect to taxes withheld at source, on amounts paid or credited on or after January 1, 2023;
b) with respect to other taxes, for taxable years beginning on or after January 1, 2023.
This Protocol includes amendments to the exemption and reduction of taxes on investment income (dividends and interest) at sourcing country, however, the details will be explained in the next month’s issue.
3. Labor Management (Lowering Age of Minor in Determining Exemption from Individual Inhabitant Tax)
With the lowering of the age of majority under the Civil Code, those who are 18 or 19 years old as of January 1, 2023 (the base date) are no longer considered to be a minor in determining their status (taxable or non-taxable person) for the purpose of individual inhabitant tax.
Taking an example of Chiyoda Ward, Tokyo in the case of FY 2023, a minor (those who were born on or after January 3, 2005) who has no dependents and whose total income for the previous fiscal year is 1,350,000 yen or less is exempt from the individual inhabitant tax.
However, minors who are married or divorced are considered to be a majority under the Civil Code.
The further information on conditions for tax exemption is available on the local governments’ websites.
(Source: Chiyoda Ward – Special Ward and Metropolitan Inhabitant Taxes) https://www.city.chiyoda.lg.jp/koho/kurashi/zekin/juminze/tokubetsuku.html
4. This Month’s Words of Wisdom
What is Europe? A fierce struggle of warring neighbors.
(Gottfried Wilhelm Leibniz)
The UK withdrawn from the EU and France experiencing a sense of humiliation. Will the EU retain its harmony with Germany taking on the dominant power?
For more details, please refer to Nagamine & Mishima JC Accounting K.K.