Nagamine & Mishima Accounting Office

Accounting practice since 1989

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Cost of Services

Cost of Services

Cost of Sales for service sales can get ugly during tax audit in Japan since clear definition is not stated in Japan the tax code. The rule of the thumb is any explanation which can be interpreted as logical to a person who is explained of the service for the first time can be considered safe. A logical allocation based on some key index figures are,

1. Number of hours
2. Number of employee or staff
3. Floor area ratio

As with most accounting policies, consistency will be the key element in making a persuasive argument to the tax auditors. In addition, there is always a cultural business interpretation whether a practice is logical or not. Therefore, it would be advised that you consult with a tax accountant whether or not what you are trying to implement is logical by Japan tax code.

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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