Nagamine & Mishima Consulting

Accounting practice since 1989

Expansion Support

services-expansion

Expansion support for growing global companies

With one of the world’s largest economies and acting as a connector between Asia and the rest of the world, Japan is an attractive market for international companies.  The challenge for those companies entering the expansion phase is to maintain steady growth while streamlining the back office operations and not running afoul of complex Japanese tax and labor laws.

 Tax authorities challenge 50% of consumption  tax returns

According to Japan’s National Tax Agency’s 2012 tax audit results, each year the tax authorities challenge more than 50% of the consumption tax returns.  The same report states that the majority of the tax assessments on withholding income tax have incorrectly interpreted the tax treaty related issues.

For international companies focused on expansion, it’s critical to have a trusted tax expert to decipher complex tax laws and legal issues. Since 1989,  the bilingual professionals at Nagamine Mishima Accounting Office (N&M) have helped international companies in Japan continue their growth and avoid the detours of costly misinterpretations.

Click on any link below to learn more about our tax and accounting services for expanding companies:

Payroll

  • Social Insurance
  • Employment Insurance
  • Monthly Payroll
  • Bonus Payroll
  • Housing Allowance

Tax Return

  • Tax Position Simulation
  • Individual Tax Return
  • Corporate Tax Return
  • Property Tax Return
  • Inheritance Tax

 Expansion

  • Accounts Receivable Process Management
  • Corporate Restructuring
  • Due Diligence (Tax & Finance)
  • Tax Support when Outsourcing to Thailand
  • Transfer Price Risk Analysis
  • Voluntary Audit

Accounting

  • SAP
  • Oracle
  • Navision
  • Netsuite, and others.

Cash Management

  • Invoice Payment
  • Tax Payment
  • Bank of Japan Reporting
  • Preserving the Bank Seal

Case Studies

Case Study: Housing Allowance in Japan

Challenge

Existing housing allowance was vulnerable to tax assessment.

An Italian company was in the process of closing their 1st fiscal year in Japan, a period that covered only a 2 month period. They had their internal accountant take complete the financial materials, unfortunately  without having N&M review it.  As preparation for tax return got underway, the N&M tax accountant pointed out that the housing allowance was vulnerable to tax assessment in case of future tax audit.

Our Approach

  • Providing the company with the overview of how housing allowance is treated under the tax code in Japan.
  • Reviewing all contracts for housing, rent and employment contract.
  • Providing insights regarding the tax liability for the company as well as individual employees.

Results Achieved

  • Helped the company avoid being adjusted for withholding income tax obligation.
  • Helped the company comply with tax code by adjusting the housing rent contract.
  • Identified other allowances which were subject to withholding income tax obligations.

Case Study: Accounts Receivable Process Management

Challenge

Expanding workload overwhelms in-house accountant.

A multinational US company with a subsidiary in Japan was suffering from an expanding workload in the area of accounts receivable management. The accountant in charge was under pressure to match the total outstanding balance at monthly deadlines and was not able to keep up with reconciling accounts receivables one by one. The process was further complicated by the fact that the sales team issued separate invoices to split service fees by departments based on customer requests. Last but not least, the invoices were settled in a variety of currencies, from Japanese Yen to US dollars and Euros, subtracting bank fees. Overwhelmed, the accountant in charge abruptly turned in his resignation.

 

Our Approach

  • Proposing a solution of assigning 1 accountant staff to take care of day to day operation and another to clean up the historical accounts receivable one by one.
  • Absorbing as much information as possible from the departing accounting  on the day to day operation.
  • Providing and continually updating a schedule in order to complete the project in the shortest time possible.

Results Achieved

  • Reconciled aging reports.
  • Cleaned up the accounts receivable, invoice by invoice.
  • Provided guidelines in the invoicing process to optimize administrative communication for the sales team as well as the accounting department.

Case Study: Tax Audit Assistance

Challenge

Passing tax audit without incurring a deeper inspection.
An Italian subsidiary with no accounting staff in Japan was about to be audited by the tax authorities. The parent company in Italy had implemented an automated process on the back end office operation. The majority of the accounting was centralized by the parent company, with limited accounting being outsourced to Nagamine Mishima Accounting Office. Since noone in the subsidiary could explain the operation’s big picture during the tax audit, the headquarters sent non-Japanese-speaking accounting staff to Japan to assist with the audit. 

Our Approach

  • Helping client understand how to avoid prolonging,  intensifying or expanding the scope the tax audit.
  • Fully preparing the staff who will be interviewed during the audit by conducting a mock tax audit.

Results Achieved

Although there were some areas where the subsidiary was vulnerable to adjustments, we helped the client avoid interpretation challenges from the tax authorities and finish the tax audit with no tax assessment.

Case Study: ERP Implementation

Challenge

Implementing ERP during major personnel transition.
Once its Japanese operation grew to a significant size, a German subsidiary decided to implement SAP.  Their new system needed to incorporate an invoicing capability, which before had been previously handled offline by spreadsheets. Unfortunately, just prior to ERP implementation kickoff, their administrative staff who specialized in the company’s invoicing process, left the company.

Our Approach

  • Modifying the kickoff date.  We proposed delaying the new invoicing implementation until the two process could be optimized into one system. This ensured that the sales staff would not be overburdened by a temporary solution that would need future adjustments, or worse, a scenario where two systems ran concurrently.
  • Avoiding duplicate entries by linking the invoicing process with accounts receivable management.
  • Providing a comprehensive explanation on how invoicing will change in the following cases: consumption tax rate change, payment methodology change by the customer, expected new product and service & payment currency changes. 

Results Achieved

  • Within 2 months Nagamine Mishima Accounting Office incorporated the offline invoicing process into the overall operation.
  • Avoided SAP modification on new consumption rate change.
  • Helped new invoicing personnel adjust to the transition.