Nagamine & Mishima Consulting

Accounting practice since 1989

Crisis Support

services-crisis

Companies at all stages of growth must occasionally face challenges, from tax audits and  social insurance inspections to corporate restructuring.  But, for internationally companies operating in Japan, the stakes are even higher.  A failed audit can trigger stiff penalties.  A mishandled transition can damage the goodwill and productivity of the local staff.

Since 1989,  the bilingual professionals at Nagamine Mishima Accounting Office (N&M) have helped international companies in Japan overcome challenges and focus on growth. We’ve created custom accounting solutions to  accommodate unique situations.

Our teams of experts specialize in tax and labor laws, bringing the unique skill sets needed to deliver resolution.  Companies can opt for a project-oriented support, or transition to monthly or yearly service.

Below we’ve listed a few of our customized accounting services. Contact us directly to learn how we can help you.

  • Dual Citizenship Tax Planning
  • In-House Training
  • Liquidation Assistance
  • Monthly Withholding Issues
  • Process Management   
  • Resolving Advanced Labor Conflict
  • Revenue Structure Assistance 
  • Tax Audit Assistance
  • Transfer Pricing Analysis
  • Transitional Support 

Case Studies

Case Study: Tax Equalization Planning

Challenge

Tax status complicated for CEO with dual citizenship

An executive with dual Japanese American citizenship became CEO of both the U.S. parent company as well as the subsidiary in Japan. The responsibilities as CEO were evenly split between the countries, but his salary was processed in the U.S.  In addition, he received a stock option from the parent company. Since the family decided to stay in Japan, this individual maintained certificate of residency in Japan. This created a complex tax status: his formal residence was in Japan, but his employment stemmed from the parent company in the U.S.

Our Approach

  • Involving a tax accountant as well as a Labor and Social Security Attorney.
  • Thoroughly reviewing the employee contracts from the U.S. as well as Japan.
  • Understanding the substance of the case and not just relying on the formality of documents.

Results Achieved

  • Separated the analysis of salary and stock option in order to structure a logical scenario in justifying the allocation of labor for the positions in the U.S. and in Japan.
  • Made a simulation of social insurance costs as well as income tax.
  • Provided a tax audit presentation scenario.

Case Study: Honing Junior Accountant

Challenge

Training an accounting manager from within the company.

A U.S. company which had outsourced all accounting to Nagamine Mishima Accounting Office had expanded to over 20 employees in Japan. It was time to hire an accounting manager to oversee the operation. But, after 1 year of searching, the company acknowledged that they would be better off hiring a junior accountant and training him to fill the position.

Our Approach

  • Gradually teaching the junior accountant the accounting operation.
  • Collaborating with the headquarters’ accounting and finance personnel, when expanding the junior accountant’s responsibilities.
  • Focusing the junior accountant on mastering the main accounting activities before  extending the scope of work.

Results Achieved

  • After 3 years of mentorship, the junior account had achieved an accounting manager level of expertise.
  • Collaborated with the parent company to help the junior accountant expand to a more prominent role within the Japanese operation.
  • Mentored on an hourly basis in case of any accounting or tax related issues.

Case Study: Liquidation Process in Japan

Challenge

Company’s accounting staff quits in the middle of liquidation.

When a U.S. company was in the process of shutting down its Japanese operation, the sole accounting staff quit before the dissolution was complete. In addition, the law firm that was handling its liquidation did not provide assistance with administrative and accounting procedures.  The company was left in the awkward situation of having no accountant while its tax settlement was still being finalized.

Our Approach

  • Assessing the situation. We confirmed with the U.S. parent company which accounting tasks needed resolution during the dissolution process and liquidation process.
  • Immediately assigning an accountant to replace the departing accounting staff.
  • Working closely with the lawyer who was appointed as liquidator to close down the company in the shortest time possible.

Results Achieved

  • Subsidiary was liquidated in minimal time.
  • Activities of liquidation was reported directly to the subsidiary controller in the U.S.  whenever there was financial movement.
  • The subsidiary controller who was responsible for the liquidation was able to complete the process without having to set foot in Japan.

Case Study: New Case Study

Challenge

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Our Approach

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Results Achieved

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Case Study: Transfer Pricing Documentation

Challenge

Upcoming audit targets transfer pricing.

A UK company which was tax audited for the past 3 fiscal years was able to get through without any additional tax assessment. The tax officers concluded that all regulatory tax requirements were met in the areas of withholding income tax, consumption tax and stamp duty. The next tax audit would focus on a transfer pricing. Since the subsidiary imported from the parent company in the UK, the company had to prepare themselves with a transfer pricing documentation and thus implement the desired transfer pricing policy under the Japanese tax code.

Our Approach

  • Coordinating with partnering boutique tax accounting office (consisting of former tax office auditors) focusing only on transfer pricing study.
  • Joining all transfer pricing study meetings conducted by the partnering tax accounting office.
  • Liaising with the UK headquarters in confirming the transaction conditions and actual substance of transaction.

Results Achieved

  • Completed the transfer pricing study and documentation to reflect the desired transfer pricing policy before the end of the fiscal year, which will be the target of upcoming tax audit.
  • Provided Q&A session both over email and conference call in understanding the transfer pricing study.