米国歳入庁が米国人が所有する海外会社の留保所得に課税する恐ろしいルールを発表しました。

米国財務省と歳入庁は昨年(2017/12/22)に発表された「移行税(transition tax)」についてのガイダンスを発表しました。

最近施行された米国歳入法のセクション965で、米国人(個人と法人の両方を含む)が所有する海外の会社(日本にある会社をもちろん含む)の内部留保について8パーセントから15.5パーセントの税金をかけることが規定されました。これは日本に居住するアメリカ人が日本で作った会社にも当てはまるので、日本で会社をやっているアメリカ人の方々には注意が必要です。

考え方としては、海外に留保された利益がいったんアメリカに配当という形で還元されたとみなして課税する仕組みのようです。

実際の税率ですが、現金には15.5パーセント、それ以外の資産には8パーセントの税金が課せられるようです。内部留保と言うのは自己資本から最初の資本金と資本準備金等を控除した利益の積み重ねで、直接どの資産項目と結びつくと言うものではないので、おそらく現金から順番にあてていって、残りをその他の資産で留保していると考えるのではないでしょうか。

いずれにせよ、日本を含むアメリカ人には大変な話の様で、アメリカ商工会議所のニュースレターでも大きく取り上げられていますし、私どもの事務所に勤務するアメリカ人CPAもこれはひどい税金だと言っていました。

こちらがIRSガイドラインの原文です。

Checklist saves your corporate tax

I became a big believer in check list recently after I read a book called Checklist by Atul Gawande. It explained various situations where a checklist played a dramatic role in reducing failure rate in medicine, law practice, construction etc. A simple check list that covers a wide range of items will save you from missing just one important item out of many that can possibly cause a major damage or unnecessary cost in any areas of your concern. Now I want to provide you with a check list that I think will probably help you save your corporate tax.

The list covers many but easy ones that you can even implement in the last minutes for most of the items.

1. Is it possible to pay rent for your office in advance for one year?
2. Is it possible to pay your insurance in advance for one year?
3. Do I want to pay Safety Net Insurance? That is actually the same as saving my money but is deductible.
4. If I want to pay year end bonus to my team, I have to send an email or notice before the end of the fiscal year.
5. Is there any bad debt (accounts receivable) that has not been collectible? If the customer went bankrupt or if I did not have any transaction with them for more than one year, I can expense it.
6. Are there any expenses that can fall under R and D category? Check with my accountant.
7. If I paid more salary to my staff, there is a chance that I can get a bit tax credit. Check with my accountant.
8. Can I pay advertisement for one year in advance?
9. Can I pay my spouse for his/her work at home?
10. Can I claim a part of my car expenses (or other major things) as expenses? Check with my accountant.
11. Did I apply for Blue Tax Payer Status? That will allow me to carry my losses for next 10 years.
12. Do I want to pay myself rent for the space I work at home (at least for next 12 months)?

Tax saving tips for SMEs

After a few years of struggle (or even from the first year), your company has started generating enough income. Now you are worried about the tax to pay.

There are some tax tips that everybody know (not everybody but many. Sorry). They are nothing illegal. There should be no much reason for you not to do them.

Paying rent for a year in advance

According to Japanese Tax Law, expenses to pay for length of period of services are allowed to be expensed when they are paid for one year at maximum in advance. The typical examples are rent and life insurance. For example, your fiscal year ends in December, pay your office rent to the landlord for the whole next year. It will be deductible from your income. The condition to meet is it has to be actually “paid” by the end of the fiscal year.

To make it clear, it is advisable to pay through a bank transfer because there will be an evidence. You also need to agree that with landlord. Please get something in writing with your landlord that you both parties agree that the rent will be paid for 12 months at the end of previous year, “unless” you propose otherwise for cashflow reason or whatever.

Safety net insurance

This one is even more generous.

Safety Insurance (Bankruptcy Insurance)

You can pay at maximum 200,000 yen per month as deductible expense and after 40 months, you can terminate the contract and get 100% refund of what you pay plus interest. The minimum contribution as of today is 5,000 yen. The economical effect here is only to push the taxable income to future, meaning you will have to recognize its refund as income when it is returned.

But it is nice to push the taxable income today so that you will receive the income when rainy day in future.

Company housing

It is rather a long time solution but it does have a great deal of impact on our personal tax and social insurance.

Your company can rent a house for you and pay half of the rent as company’s deductible expense. By reducing your salary and pay it as a rent to your landlord, your taxable income will be reduced by such amount. Because the amount of social insurance contribution is also based on your salary, you will save your income tax as well as social insurance.

Buying property overseas

This one is still popular especially among foreigners who have access to property market abroad. Because the speed of depreciation is determined by how old the property is, properties in foreign countries (especially in Europe and North America) were advantageous because building that is 100 years old is not special there.

You need to be a little bit careful with this. It seems that a new restriction will be coming into place to ban this because the authority seems to think this one is not fair.

There are much more but I want to mention them in a separate post.

Blue Tax Form status

Make sure to obtain “Blue Tax Form” status. There are a few major tax benefits such as tax credits and you can carry your operating losses for next 10 years.

Consumption tax -Simplified Method

This one is basic too but make sure you can apply for the simplified method. By choosing this, you will be using deemed tax rate for consumption tax instead of actual calculation (where you plus and minus all the taxable sales and expenses). The eligibility is that your taxable sales in two years back has to be between 10 and 50 million yen.

If the sales in the fiscal year two years ago was less than 10 million yen, congratulation!, you are free of consumption tax (most of the cases).

Japanese qualified stock options

With stock options being qualified, the gains will be taxed as capital gain (flat 20.42%) and it will be taxed only at the sales of the shares (as opposed to being tax at the exercise on the gain as salary income which is taxed with progressive tax rate).

Qualified stock option has to meet the following conditions:

1) Person to be vested are employee, director or executive director, not owning more than 1/3 of its shares,
2) Stock option has to be exercised after two years and within 10 years from the vesting date,
3) Strike price in total has to be within 12,000,000 yen per person,
4) Strike price has to be higher than the fair value at the time of vesting, and has to be granted for free,
5) Stock options cannot be transferable,
6) Once the stock are issued, it has to be managed by a qualified financial institutions, and
7) It has to be reported to the tax office by Jan. 31st of the next year (Shiharai chosho).

Please note that auditors or external consultants are not eligible for qualified stock option.