• Annual Payroll Deadlines
• Japan Consumption Tax Increase
• HR Tips
• Japan FTA & Economic News
• Hong Kong Business Setup
• Tokyo Executives Business Networking Event

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• Annual Payroll Deadlines
• Japanese Economy
• Disaster Relief Funding
• Gift Expenses
• Canadian Chamber of Commerce in Japan Corporate Membership
• Tokyo Executives Business Networking Event

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• Earthquake and Tsunami News - Update on Reconstruction and Relief Efforts
• Social Insurance Premiums Increase
• US Personal Income Tax Filing 2010 Service
• Japan Free Trade Agreements
• Tokyo Executives Business Networking Event

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Solid Japan is pleased to announce that we will be offering US Personal Income Tax Preparation support this tax season. US citizens and Green Card holders are subject to taxation on worldwide income even while living abroad. There are exemptions and tax treaties that exist to alleviate the tax burden, but it is necessary to file a return. This year’s filing date has been slightly extended to April 18th, but US citizens and Green Card holders who are living abroad are granted an automatic 2 month extension to June 16th. For more details on US tax filing procedures and deadlines, please visit www.solidjapan.com/ustax or contact us at info@solidjapan.com to schedule a consultation with Solid Japan’s US CPA.

Solid Japan is a proud sponsor of the Tokyo Executives business networking group.  The group will be holding its next monthly event on Thursday March 3rd. For more details please visit www.tokyoexecutives.com. These events are an opportunity for executives and upper management in the Tokyo business community to meet to exchange ideas, discuss business and enjoy the theme of the event.

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Happy New Year from Solid Japan

Solid Japan wishes you and your family a happy, healthy, and prosperous 2011. We look forward to continuing to serve you throughout the new year.www.solidjapan.com

Kan Administration Announces Corporate Tax Cut

Prime Minister Naoto Kan in December unveiled a plan to reduce the corporate income tax rates from the current 40% to 35%. This follows several months of consultation with industry groups and the general business community. The move is intended to bolster Japan’s competitiveness and to help keep jobs from migrating overseas. Under the plan, businesses will also be able to apply tax loss carry forwards for up to 9 years instead of the current 7 years. The current special reduced tax rate of 18% will also be further reduced to 15% and extended for 3 years for small and medium sized business. Following the 3-year extension, the regular rate will be 19%, reduced from 22%.The tax cut plan first must receive diet approval and implementation is expected from fiscal 2011.

Fixed Asset Report

Businesses in Japan must complete and file a fixed asset report to their local tax office by the final day of January. Fixed assets are generally defined as assets with a value of JPY100,000 or above. However, depending on the value and type of the asset, the method of treatment can vary. Your tax advisor can help determine proper classification of your fixed assets for tax purposes. Or contact Solid Japan for assistance. info@solidjapan.com

January Payroll Report Deadlines

HR managers and payroll administrators will want to be aware of the January 31st deadline for submitting the annual Hoteichosho and the Kyuryo Hokokusho reports. The Hoteichosho is the annual report that must be submitted to the national tax office concerning the total salary, retirement allowance, etc., paid to each employee during the year. The Kyuryo Hokokusho is a similar report sent to the employee’s local tax office, which is used to determine their local inhabitant tax amount. For further information, please speak with your payroll provider or contact Solid Japan. info@solidjapan.com

Economic Growth Exceeds Previous Reports Japan’s economic growth for the quarter ending September 30th, was recently re-stated to 4.5% on an annualized basis. This is somewhat higher than the 3.9% originally reported by the government. The relatively strong growth is being attributed in large part to recent government stimulus initiatives.

Japan and Hong Kong Tax Treaty Japan and Hong Kong concluded a tax treaty agreement in November which aims to reduce the tax burden on certain types of income, and provide relief against double taxation for those conducting business in both countries. There are also information sharing stipulations contained in the agreement. Once ratified by the governments of both countries, the treaty’s various provisions will begin taking effect at different times in the year following ratification. Among the treaty’s main areas of focus are capital gains, interest, dividends, royalties and income tax. For additional information visit: http://www.ird.gov.hk/eng/pdf/Agreement_Japan_HongKong.pdf

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Japanese tax law allows for employer-provided accommodations where the company is the owner of the building or has entered into the lease of the accommodations on behalf of the employee. The amount benefit available to the employee will depend on factors such as, whether the employee is a company director or regular employee, the size and condition of the accommodations, and if any business is also conducted in the accommodations.

Your tax advisor can assess your company’s individual circumstances or contact Solid Japan for more information. info@solidjapan.com

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Newsletter November 2010

With autumn and the weather becoming cooler, we hope you have been able to get back to focusing on your business after the hot summer. We are sending you the Solid Japan November Newsletter with news and information on business in Japan to assist you and your business. Please contact Solid Japan at info@solidjapan.com to find out how we can help your business.

Government Stimulus

The Japanese government has been busy this month working on ways to improve the business environment.

A new 5.05 trillion yen (USD 55 billion) stimulus plan was approved by the cabinet early last month as a way to save and create up to 500,000 jobs. This is the second stimulus plan introduced by the Kan administration in as many months. The latest stimulus is seen as a supplement to the plan last month which was widely criticized as being insufficient.  That plan was for 915 million yen and purported to create 200,000 jobs.

Tax Cuts

The Nikkei Keizai Shimbun has reported that the Japanese government is ready to propose corporate tax cuts from its current rate of 40%. The cuts are said to be 5% for domestic corporations and reductions to of a rate of 25-30% for foreign owned companies. Discussions of corporate tax cuts have been ongoing since early summer when Prime Minister Kan took office along with new METI minister also declaring that Japanese corporate tax rates needing to be cut by at least 5% when he started in that position in September.

The “Blue Form”

The Blue Tax Form (Aoiro Shinkoku) affords Japanese companies special tax privileges under tax law. Some of the benefits include:

·           Longer periods for carrying forward and back of losses

·           Special deductions from tax and income

·           Less powers of the tax office to make corrections

·           Other tax/accounting benefits

In order to apply for these tax advantages a company must record and maintain proper accounting records and apply by the appropriate deadlines. Please contact Solid Japan to ensure your business is receiving the benefits of the Blue Form. info@solidjapan.com

Solid Japan Sponsors After 7 Event

A good time was had by all 550 people who attended the E central After 7 Event held at the yet to be opened XEX in Nihonbashi where Solid Japan was a title sponsor.  Photos and information of the event can be seen at www.careercenter.ecentral.jp/after7-event-report/

Tokyo Executives

Tokyo Executives will be holding its monthly event November 18th at xxxxx. More information can be found at the Linked In group homepage www.linkedin.com/groups?mostPopular=&gid=1906023

September Trade Surplus Rises

Even with the pressures of the strong yen, Japan’s September trade surplus increased 54% compared to the previous September to almost 800 billion yen. This increase went against the expectations of many economists according to polls conducted by Dow Jones Newswires. Despite a rise in exports of 10%, an increase of 14.4% or nearly 6 trillion yen was the reason for the increase in the trade surplus.

Did you know?

Did you know that companies with more than 10 employees must have formal work rules registered with the Labour Standards Inspection Bureau? This is a formal procedure that goes beyond a regular internal company rule book or policy and procedures.  Solid Japan can help your firm comply with this requirement. Contact us for more information. info@solidjapan.com

Do you hire independent contractors?

If so, it is very important that you have a proper Independent Contractor Agreement in place and understand the potential tax and labour issues that could result. There are ways that employers can protect themselves against these potentially costly problems. Contact Solid Japan to find out how you can protect you and your business. info@solidjapan.com

solidjapan.com

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 Solid Japan Newsletter – September/October 2010

Pension Premiums Increasing from September

The Social Insurance Office is increasing premiums employers and employees pay for pension contributions effective from the September 2010 salaries. Total combined employee and employer Premiums will increase from 15.704% to 16.058%. The increases are to be shouldered equally by the employer and employee as the contribution ratio for these programs is 50:50 which means employer and employee will each pay 8.029% of gross monthly salary plus commuting costs.

For more information, visit: www.kyoukaikenpo.or.jp

¥915 billion stimulus plan

The Japanese government unveiled a ¥915 billion stimulus plan last Friday to give a boost to the Japanese economy in order to support an economy which has long been suffering and further distressed by the recent rise in the yen. The plan purports to create about 200,000 jobs focusing in the areas of medical care, energy, the environment and tourism, and give GDP a bump by 0.3%.

Prime Minister Kan with his leadership position secured has vowed to focus efforts on curbing the rise of the yen and improving the Japanese economy starting with this plan which will assist young people to find work and provide incentives to companies who are able to provide jobs.

The effectiveness of these measures will take some time to appear but they do demonstrate a proactive approach by the government to improve the economy.     

Strong Yen –Is it all bad?

With all of the talk recently of the high price of the yen versus all of the world’s currencies, it has not been all bad news.  For those with overseas suppliers, foreign M&A aspirations and travel abroad, the rise of the yen has been a welcome cost saver.

Memories of the ‘carry trade’ still fresh from only a few years ago, the yen has made a big turn around since the downturn in the global economy as investors seek a safe haven for their savings.  The yen has long been one of the world’s popular places to keep money during turbulent times. Even China who have long reportedly been buying up US bonds are buying Japanese bonds to stay diversified and anticipating a further increase in the value of the yen as many experts predict.

Despite the recent intervention by Prime Minister Kan to weaken the yen, it may prove to be ineffective (see the Swiss France) with some officials and experts admitting that any intervention may not yield the intended results and even cause further harm to the Japanese economy.

It appears that the high yen will be with us for a while and that it is an excellent time to be generating revenue in Japan and receiving Japanese yen.

 What`s the Deal with Revenue Stamp Tax.?

We frequently receive questions from clients on what type of documents require revenue stamps and why? In order to take away some of the mystery, we’ve put together a brief overview of revenue stamp laws in Japan.

First of all, revenue stamps resemble postage stamps, and you can often see them affixed to official documents in Japan. They are in fact the government’s primary method of collecting taxes and fees imposed on documents such as contracts and receipts. Revenue stamps are available in denominations ranging from 1 yen to the maximum 1,000,000 yen, and can be purchased at post offices and most convenience stores.

There are approximately 20 categories of documents that require revenue stamps, including most commercial agreements, real estate sales contracts, lease agreements, employment agreements, bank loan contracts, official receipts, etc.  Depending on the type and value of the contract or agreement, there is a prescribed denomination of revenue stamp that must be affixed.  Although contracts without revenue stamps still remain legally valid, should the tax office find you have not affixed the appropriate revenue stamps, they can impose a fine equal to triple the amount of the prescribed stamp tax duty. Also, in cases where contracts are amended, additional stamp duties of 200 yen or more are required. For more information on revenue stamps, please visit the following link: http://www.nta.go.jp/taxanswer/inshi/7140.htm

Government Incentive Programs for Business Start-Ups

Did you know that there is a program run by the Health, Labour and Welfare Ministry that provides subsidies to help cover a portion of company set-up costs? The program is available to individuals who have lost their job, tried unsuccessfully through Hello Work to find new employment, exhausted their unemployment insurance benefits and subsequently decided to start their own business. The program covers up to one-third of start-up costs incurred in the first 3 months up to a maximum of 2 million yen - or one-half of start-up costs up to 3 million yen in rural areas. The company must stay in business for more than 3 months and must enroll in the Unemployment Insurance program within a year of the company establishment date. Also, the owner must be the Representative of the new company and must have been paying into the unemployment insurance program for more than 5 years. Other conditions may apply. For more information contact Solid Japan. www.solidjapan.com

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Solid Japan Newsletter – July 2009

Government Introduces New Tax Measures for SMEs

To help provide stimulus in the economic downturn, an additional tax reform bill was recently passed by the Diet. The following are two key changes:

1.   Increase in amount of deductible Entertainment Expenses for Small and Medium Sized Companies

Prior to the tax reform bill, the deductible limit of entertainment expenses for companies whose paid-in capital is JPY 100 million or lower was the lesser of JPY 3.6 million or 90% of the actual entertainment amount. The new amendment raises this to JPY 5.4 million or 90% of the actual amount. This amendment will apply for fiscal years ending on or after April 1, 2009.

2.   Carryback of Losses Refund

Small and Medium-sized companies filing Blue Form returns may be eligible to claim a refund for a portion of the corporate taxes they paid last year if they will be in a loss position this year. This applies to companies with fiscal years ending after February 1, 2009. In order to receive the refund, companies must submit an application form to their tax office within the fiscal year they recognize the loss. The basic formula for calculating the refund is: last year’s corporate tax paid amount X this year’s loss /last year’s profit.

Economic Indicators on the Rise in Japan

Japanese consumer confidence was on the rise again in June, perhaps indicating that the worst fears about the recession are behind us. The household confidence index edged up to 37.6 in June from 35.7 in May. Another encouraging economic indicator is the factory output index which shows that factory output rose 5.7% in May, its third straight monthly increase.

Solid Japan Launches New Website www.solidjapan.com

We are pleased to launch our newly re-designed website. With a fresh, clean look and easy to navigate information bars, we hope you will visit our new site often. iPhone users can also add the new Solid Japan iPhone button by visiting www.solidjapan.com and pressing the “+” button at the bottom of the screen.

Solid Japan Founder Featured on itv-asia.com

Solid Japan’s Managing Director Robert Crane was recently interviewed for the Business Entrepreneur’s section on the itv-asia.com website. itv-asia is a leading resource for business information in the Asian region. The topics discussed in the segment include the process for setting up businesses in Japan, and Robert’s experiences helping foreign businesses get started. The interview hosted by Dave Mori, is expected to be posted on the itv-asia website in the coming days.

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Solid Japan Newsletter – July 2009

Solid Japan Launches New Website www.solidjapan.com

We are pleased to launch our newly re-designed website. With a fresh, clean look and easy to navigate information bars, we hope you will visit our new site often. iPhone users can also add the new Solid Japan iPhone button by visiting www.solidjapan.com and pressing the “+” button at the bottom of the screen.

Solid Japan Founder Featured on itv-asia.com

Solid Japan’s Managing Director Robert Crane was recently interviewed for the Business Entrepreneur’s section on the itv-asia.com website. itv-asia is a leading resource for business information in the Asian region. The topics discussed in the segment include the process for setting up businesses in Japan, and Robert’s experiences helping foreign businesses get started. The interview hosted by Dave Mori, is expected to be posted on the itv-asia website in the coming days.

Government Introduces New Tax Measures for SMEs

To help provide stimulus in the economic downturn, an additional tax reform bill was recently passed by the Diet. The following are two key changes:

1. Increase in amount of deductible Entertainment Expenses for Small and Medium Sized Companies

Prior to the tax reform bill, the deductible limit of entertainment expenses for companies whose paid-in capital is JPY 100 million or lower was the lesser of JPY 3.6 million or 90% of the actual entertainment amount. The new amendment raises this to JPY 5.4 million or 90% of the actual amount. This amendment will apply for fiscal years ending on or after April 1, 2009.

2. Carryback of Losses Refund

Small and Medium-sized companies filing Blue Form returns may be eligible to claim a refund for a portion of the corporate taxes they paid last year if they will be in a loss position this year. This applies to companies with fiscal years ending after February 1, 2009. In order to receive the refund, companies must submit an application form to their tax office within the fiscal year they recognize the loss. The basic formula for calculating the refund is: last year’s corporate tax paid amount X this year’s loss /last year’s profit.

Economic Indicators on the Rise in Japan

Japanese consumer confidence was on the rise again in June, perhaps indicating that the worst fears about the recession are behind us. The household confidence index edged up to 37.6 in June from 35.7 in May. Another encouraging economic indicator is the factory output index which shows that factory output rose 5.7% in May, its third straight monthly increase.

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