February 2010 - Newsletter
Tags: accounting, business, japan, news, tax
February 2011 Solid Japan Newsletter
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Please remember that you can view archived versions of our Newsletters at www.solidjapan.com/category/newsletter/
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US Personal Income Tax Filing 2010 Service
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Deadline for 2010 Japanese Personal Income Tax Filing
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The filing period for 2010 Japanese Personal Income Tax is February 16th to March 15th. Please note that for those who received income from more than one source, those with income over JPY 20 million, or anyone one else who is required to file a personal return will need to file and pay any tax owing by the final day of this period. Filing and payment extensions are possible but they must be applied for and approved by the tax authorities.
In many cases, employers would have adjusted an employee’s final salary payment of 2010 to reflect whether the employee was subject to further tax or was owed a tax refund based on his/her 2010 income and taxes previously withheld.
For more information, please see the National Tax Agency website www.nta.go.jp/foreign_language/index.htm.
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Japan Exports Grow
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With the pressure of a strong yen easing slightly, Japanese exports were 10.6% higher in December than the previous month and 13% higher than the same month in the previous year. Significant increases were made in exports to China, North America and Europe. The 2010 export growth of 24.4% was the first increase since 2007.
The central bank also reassessed its October forecast of 2.2 % GDP growth to 3.3% for the fiscal year ending March 31.
Economists appear upbeat on 2011 with a general consensus of further growth on expectations of a strengthening global economy.
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Auto Production and Housing Starts Up - Increase in Monthly Wages
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More positive news from the automobile and construction sectors.
Automobile production made a comeback in 2010 rising 21.3% against 2009 for its first increase in 3 years. The large growth in production was fueled by a 33.8% growth in exports, coming from strong sales in bus, truck and motorcycle sales in Asia. Incentives for more environmentally friendly low carbon producing vehicles helped increase domestic sales.
Japan housing starts also rose 3.1% in 2010 with Tokyo leading the way with a 7.4% increase. Developer housing starts and single family homes each grew approximately 20% respectively, with the latter showing an increase for the first time in four years.
Good news for workers as well, as there was a 0.5% increase in the average monthly wage in 2010 to JPY 317,092. This increase was buoyed by a 9.1% increase in overtime pay and a slight 1.5% rise in bonuses. It is notable because it is the first time since 2006 an increase has been recorded in monthly wages. |
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Inward Foreign Investment Promotion Initiatives
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For further information please visit: http://www.jetro.go.jp/en/invest/newsroom/pdf/2011/E_public_offering_guidelines.pdf
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Employee Benefits
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According to Japan’s Tax Regulations, employers can provide employees certain types of non-taxable compensation outside of contracted salaries and bonuses. This non-exhaustive list introduces some of these benefits:
Employee Housing - Directors may receive up to 50% (or more in some special cases) for subsidized housing, while depending on the conditions, regular employees may be eligible for a higher percentage.
Low interest home loans - A favorable interest rate from the employer to the employee is permitted without being taxable in the hands of the employee where the interest rate for the loan is at above the prescribed minimum rate set out by the tax code.
Low interest loans - An employer may also provide an employee with a low interest loan that qualifies as a non-taxable benefit provided the interest rate is no lower than the prescribed minimum rate.
Stock options - A stock option which meets specific requirements can be given to employees without generating a taxable event provided it is not exercised within 2 years and has a value below a specific amount. Once exercised, the gains are subject to the same taxation as all stock gains.
Recreational Company Travel - A company subsidized recreational trip of 5 days (4 nights) or less is permitted where 50% of employees in the company, factory or office participate.
For further information on these and other non-taxable employee benefits, please contact your tax advisor or Solid Japan at info@solidjapan.com.
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Tokyo Executives
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About Us
Solid Japan is a complete business support solutions provider for foreign and foreigner-owned businesses in Japan. We offer one-stop convenience and exceptional customer service. Whether you are setting up a new company or Japanese subsidiary, need help with accounting or payroll, Solid Japan is standing by to assist. To find out more about our full range of competitively priced services, please visit our website at: www.solidjapan.com
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