Incentive bonus to Japan stsff
Incentive Bonus payment to directors of Japan subsidiary
Under the Japanese corporation tax law, directors' remuneration should
be "Fixed monthly salary" to be a tax deductible.
1. There are two ways to pay remuneration to be a tax deductible other than "Fixed monthly salary".
1) Fixed payments in accordance with an advance notice to the tax office;
2. Provision method of the incentive bonus which becomes realistic to be tax deductible.
[Basic salary of the current year + incentive bonus of the previous period] / 12 months could be a “Fixed monthly salary” which should be approved by a General shareholder's meeting within a 3 month from the accounting year end.
3. Alternative way to pay Incentive bonus to staff of Japan subsidiary.
Ministry of Justice announced on 16 March 2015 that representative director
of Japan company can be non resident of Japan. Before that at least one
of Japan resident was required as a representative director.
4. Review is necessary from the business perspective.
You should compare pros and cons form the business perspective before introduce
a new director position.
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|YAMAJO International Tax & Accounting Office|