Nagamine & Mishima Accounting Office

Accounting practice since 1989

  • English
  • 日本語 (Japanese)
  • About
    • Message from the Managing Partner
    • Leadership
    • Advantage
  • Services
    • Startup Support
    • Expansion Support
    • Crisis Support
    • Cloud Support
  • Resources
    • Seminars
    • Newsletters
    • Monthly Checklists
    • Japanese Business Guide
  • Blog
  • Clients
  • Contact

10th Edition IASB, US LLCs , Shiji

December 10, 2009

Accounting  (Source: “Keieizaimu Magazine”)

IASB proposed a new definition of “control” for revenue recognition. Accordingly, if a construction contract meets the requirements, revenue recognition based on the percentage of completion method which has been widely discussed might be permitted.

Taxation  (Source: “Zeimutsushin Magazine”)

The Second Thought on Tax Treatment of US LLCs

Under the previous Japan’s tax haven rules, US LLCs applying pass-through taxation in the United States were classified as Specified Foreign Subsidiaries since the tax burden rate on earnings of LLCs is 0 percent. However, the earnings of the LLCs were considered to be distributed and taxed in the United States when the Japanese domestic companies are members of the LLCs. As a result, the earnings of the LLCs were not required to be included in the taxable income of the Japanese domestic companies since the LLCs were considered not to reserve the earnings.

However, double taxation on retained earnings of LLCs could result under the 2009 Tax Reform since earnings of LLCs are required to be included in taxable income of Japanese domestic companies and withholding taxes on dividends received from LLCs has become ineligible for direct foreign tax credit. Therefore official opinion from National Tax Agency is expected to be issued.

This Week’s Words of Wisdom

“Better be the head of a dog than the tail of a lion” (“Record of the Grand Historian” (Shiji))

I learned that Chinese like this saying at Chinese classics lesson during high school.
I like it as well.

Blog Categories

  • Blog
  • Facts about Tax
  • Newsletter

Need support for your business in Japan?


With over 25 years experience, our team is here to help. Fill out our simple contact form and we will be in touch very shortly.

People are Talking

  • “The launch of Berry Bros. & Rudd Limited’s Japanese branch in November 2008 required the support of a knowledgeable, reliable and professional accounting firm and we were therefore fortunate to find all of these qualities working with the Nagamine & Mishima Accounting Office.

    Since assisting us with the initial set-up, N&M have managed our monthly and year-end Accounts as well as handling our Payroll, ensuring compliance with Tax regulations and filing annual Tax Returns and supervising year-end stock counts.  They respond to all queries in a very timely manner, their work is of a high consistency and their approach friendly.

    With N&M assistance we have confidence in the controls and integrity of the accounting information for our Japanese operations.”

    Philip Duggan, Finance Director

    Berry Bros. & Rudd Limited Japan branch