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1. |
Family Corporations surtax |
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For accounting years beginning on or after April 1, 2007, undistributed profits of Family Corporations (i.e. companies with group ownership in excess of 50%),
with paid-in capital of 100 million yen or less, will not be subject to Family Corporations surtax. |
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2. |
Directors' Compensation -Fixed monthly payment- |
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Additional clarification has been issued since our May 31,2006, Tax alert. Under the new guideline, deductible directors' compensation can be clarified as one of the following types; |
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Type #1 |
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A fixed monthly salary will be applied from the first month of the fiscal year. |
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Type #2 |
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New compensation will be applied from the fourth month of the fiscal year upon approval from the Board of Directors' meeting.
With the exception of the one-time change in compensation, each monthly payment is fixed. |
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Type #3 |
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When the monthly salary decreases due to a significant deterioration in the company's financial situation, otherwise the compensation amounts are fixed. |
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Type #4 |
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Fringe benefits which are provided on a continuous basis and the amount of the benefits is generally stable month to month. |
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3. |
Late charges to directors' compensation |
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In the past, if the new compensation was undecided by the designated timeframe,
retroactive adjustments (i.e. adjustments to past salary) were accepted and those amounts were treated as being deductible.
From the latest tax revision, such differences are no longer tax deductible. |
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4. |
Change of directors |
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When a directors' compensation changes in accordance with a change in position of the director,
that new compensation amount will be considered deductible as long as the amounts are fixed. |
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