1. Accounting (Source: “Keiei Zaimu Magazine”)
In June, the Lower House passed the proposals for a consumption tax hike and social security reform legislation. When it becomes law, the legislation will raise the sales tax rate to 8 percent in April 2014 and to 10 percent in October 2015. Teikoku Databank conducted a survey on the impact of the tax hike on corporate performance, covering 228 million firms around the country. According to the results, 49.7 percent of respondents were concerned about the impact from “increase of tax burden”; 39.2 percent, about the impact from “inability to pass the hike on to sales prices”. 26.1 percent of respondents replied that they will implement huge capital investment in their offices, plants, and so on, ahead of schedule. Most of the firms also expressed their concerns about a further downturn in consumer confidence.
2. Taxation (Source: “Zeimu Tsushin Magazine” )
1) Under the 2012 tax reform, a new reporting requirement for foreign stock-based benefits was introduced. When an officer, etc. of a Japanese subsidiary of any foreign company is granted stock-based benefits from that company, the subsidiary is obliged to submit a “payment statement to report foreign stock based benefit”. This requirement will be applied to all relevant statements reported on or after January 1, 2013. Under this requirement, if an officer or employee of a Japanese subsidiary exercises stock options that were granted by a particular foreign company and gains a profit from them during 2012, the Japanese subsidiary is required to report the payment statement showing names of officers, etc. and details of benefits.
2) On August 10, the Diet passed the revised consumption tax law to increase the tax rate. As a result, the sales tax rate will rise to 8 percent from April 1, 2014 and to 10 percent from October 1, 2015.
3. Labor Management（ Employees’ Work Hours Management）
How do you keep track of your employees’ working hours? Through on-site observation by managers, self-reporting, time cards, PC log-on/off records, IC cards, etc. Even fingerprint authentication systems are becoming popular for prevention of ID fraud.
As unpaid overtime (so-called “service overtime”) has become a social problem, Ministry of Health, Labor and Welfare has announced the “Guidelines for measures to be taken by employers to appropriately identify employees’ work hours” (April 6th, 2001, No. 339). In accordance with these guidelines and other principles, employers are required to appropriately manage employees’ working hours by the following means:
◇Establishment of working system which eliminates unpaid overtime
In addition to proper management of employees’ working hours, employers are required to consider improvement of employees’ working environment. In addition, employers must create an efficient, streamlined working system, enabling the elimination of unnecessary overtime work.
◇Fixed overtime allowance
In principle, if an employee works more than 40 hours/week or 8 hours/day, or works late at night, the employer must pay 25% above and beyond the base hourly wage per hour worked. If an employee works on statutory holidays (at least 1 day/week or 4 days during a four-week period) the employer must pay 35% extra wage per hour worked (Labor Standards Law, Article 37).
On the other hand, there is no legal problem in paying more overtime allowance than what is actually owed. In order to reduce the trouble of overtime calculation and to improve employees’ working conditions, employers may pay overtime allowance in a fixed amount, as long as it is more than or not less than the statutory minimum requirement.
◇Requirements to implement fixed overtime allowance system Below are the minimum requirements for the implementation of the fixed overtime allowance system:
1. The number of employees’ working hours must be recorded on a daily basis even though the company is implementing a fixed overtime allowance system.
2. If the actual number of overtime hours exceeds the number equivalent to the fixed overtime allowance, the employer must pay an extra wage for the additional hours.
3. Even if the number of actual overtime hours is less than the number equivalent to the fixed overtime allowance, the employer must pay the whole amount of the latter.
4. This Week’s Words of Wisdom
Do not hire a man who does your work for money, but him who does it for love of it.
(Henry David Thoreau)
I would like to add the following personal observations to this proverb based upon my own experiences:
1) When someone starting to work makes money his/her first priority, he/she will unexpectedly leave to take another job that pays better.
2) I have never seen a person chasing only money and catching it.