TOKYOAlliott Group Asia Pacific Conference               Singapore – June 2011
www.aplaw.jpPAYROLL REGULATIONS1.    What documentation must be produced by employers to     satisfy legal requirements?  ...
www.aplaw.jpPAYROLL REGULATIONS2.       What withholdings must an employer make?        Withholding income tax        In...
www.aplaw.jpPAYROLL REGULATIONS3.    Are there compulsory contributions to Superannuation or      Pension plans?      Yes:...
www.aplaw.jpINCOME TAX1.       When will a relocated employee to your country be         deemed to be a tax resident?     ...
www.aplaw.jpINCOME TAX2.    Does your country have different classifications for      residents? (e.g. Permanent and Tempo...
www.aplaw.jpINCOME TAX3.    What tax free or tax concessional allowances can be paid to      new residents and/or temporar...
www.aplaw.jpINCOME TAX4.    What are the tax rates for residents and non Residents?       National Income tax scaled at 5...
www.aplaw.jpINCOME TAX5.    What other tax effective salary packaging opportunities exist      for a relocating employee? ...
www.aplaw.jpEMPLOYMENT LAW1. What are the visa requirements for an employee coming to    work in your country?    Many di...
www.aplaw.jpEMPLOYMENT LAW2.    What mandatory entitlements must be provided to      employees? (e.g. annual leave, sick p...
www.aplaw.jp EMPLOYMENT LAW3.    Are employment contracts mandatory?        Employment contracts not required, but employ...
www.aplaw.jpEMPLOYMENT LAW4.   Redundancy & Termination        No separate concept of “redundancy” - termination for     ...
www.aplaw.jpEMPLOYMENT LAW      Termination procedures are not formalised at law but       need to be reasonable      Em...
www.aplaw.jpEMPLOYMENT LAW5.    Can an employment contract overrule mandatory      entitlements for employees?        Onl...
www.aplaw.jp         Philosophy                         The Firm                                            *   One of Jap...
www.aplaw.jp              Address                         Contacts        Fukoku Seimei Bldg                 For further i...
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Expat support in japan atsumi & saki Alliott Group 2011

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Expat support in japan atsumi & saki Alliott Group 2011

  1. 1. TOKYOAlliott Group Asia Pacific Conference Singapore – June 2011
  2. 2. www.aplaw.jpPAYROLL REGULATIONS1. What documentation must be produced by employers to satisfy legal requirements?  Roster of Workers  Wage Ledger  If 10 or more employees, “Works Rules”  Other notifications required if a new office of an offshore company 2
  3. 3. www.aplaw.jpPAYROLL REGULATIONS2. What withholdings must an employer make?  Withholding income tax  Inhabitants’ tax  Public insurances  Taxes are usually settled by monthly withholdings and a year-end adjustment  Usually no need for employees to separately file a tax return (exceptions: salary exceeding ¥20 mil, receiving salary payments from more than one employee, has other types of income, etc.)  Deductions from taxable income possible 3
  4. 4. www.aplaw.jpPAYROLL REGULATIONS3. Are there compulsory contributions to Superannuation or Pension plans? Yes:  Workers’ Accident Compensation Insurance  Employment Insurance  Health and Nursing Care Insurance  Employees’ Pension Insurance 4
  5. 5. www.aplaw.jpINCOME TAX1. When will a relocated employee to your country be deemed to be a tax resident?  Domiciled in Japan  One year continuous residence in Japan 5
  6. 6. www.aplaw.jpINCOME TAX2. Does your country have different classifications for residents? (e.g. Permanent and Temporary)  Residents – (i) domiciled or (ii) continuous residency in Japan for one year  Non-permanent Residents – individuals that meet all of the following criteria:  Resident;  foreign citizen; and  domiciled or resident in Japan for up to five of the last 10 years  Non-resident – individuals that are not “Residents” 6
  7. 7. www.aplaw.jpINCOME TAX3. What tax free or tax concessional allowances can be paid to new residents and/or temporary residents?  Nothing specific  Non-resident only taxed on certain Japan sourced income  Non-permanent Resident only taxed on:  Japan sourced income (remitted to Japan or not); and  foreign sourced income paid in or remitted into Japan  Residents taxed on world-wide income  Tax efficient for housing to be leased by employer 7
  8. 8. www.aplaw.jpINCOME TAX4. What are the tax rates for residents and non Residents?  National Income tax scaled at 5% (<JPY1,950,000 p.a) to 40% (>JPY18,000,000, p.a)  Flat rate taxes apply to certain income earned by non- residents  Local (“Inhabitants”) taxes – 10%  Other taxes if self-employed (e.g., business tax, consumption tax) 8
  9. 9. www.aplaw.jpINCOME TAX5. What other tax effective salary packaging opportunities exist for a relocating employee?  Nothing specific for relocating expats  Retirement compensation taxed at lower rates and separately from other income; not certain if foreigners can use this  Lease residence in employer’s name 9
  10. 10. www.aplaw.jpEMPLOYMENT LAW1. What are the visa requirements for an employee coming to    work in your country?  Many different categories of visa – depends on the activity  Different requirements for each category (experience, education, etc.)  Non – visa restrictions, e.g. lawyers 10
  11. 11. www.aplaw.jpEMPLOYMENT LAW2. What mandatory entitlements must be provided to employees? (e.g. annual leave, sick pay, redundancy and termination payments etc)?  Minimum wage  Overtime – complex – not applicable to “Management”  Leave – no entitlement for the first 6 months, the increases to 20 days after 6.5 years service  Maternity leave – pre-and post-birth  Childcare leave – child up to 1 year old  Family care leave These may be unpaid but the employee may be entitled to payment from state insurance. 11
  12. 12. www.aplaw.jp EMPLOYMENT LAW3. Are employment contracts mandatory?  Employment contracts not required, but employee must be given a statement of basic terms:  employment period (commencement date, and term if         fixed);  place to work  responsibilities  regular time to work, holidays, overtime, leave  wages  matters related to the termination of employment and  details of any retirement allowance  Employer must ensure key employment terms understood by the employee  If 10 or more employees must have “works rules” setting out certain matters as required by law 12
  13. 13. www.aplaw.jpEMPLOYMENT LAW4. Redundancy & Termination  No separate concept of “redundancy” - termination for “business reasons”  Termination of an employment agreement (other than a fixed term agreement on expiry, or termination for cause) requires 30 days’ notice or pay in lieu, or a mix of the two  Termination of a fixed term employment agreement on expiry of a fixed term may be required to have reasonable grounds when there is a reasonable expectation of the employee for renewal of the fixed term employment  “Dispatched workers” hired through agencies common, and can be terminated easily by the contracting employer 13
  14. 14. www.aplaw.jpEMPLOYMENT LAW  Termination procedures are not formalised at law but need to be reasonable  Employer is under a duty to fully consult with the employee  Terminating employment other than on expiry of a fixed term can involve significant time and cost  Foreign company intending to terminate employee should take advice ASAP 14
  15. 15. www.aplaw.jpEMPLOYMENT LAW5. Can an employment contract overrule mandatory entitlements for employees?  Only if better than the mandatory entitlement 15
  16. 16. www.aplaw.jp Philosophy The Firm * One of Japan’s leading law firms and the first Japanese law firm to Thinking and Acting create a foreign law joint venture Globally * Founded in 1994, the firm has doubled in size in the last 3 years andWe are a multi-lingual and multi- now has over 80 lawyers, including 23 Partnerscultural firm, where productiveinteraction among Japanese bengoshi * 4 foreign Partners collectively having over 50 years experience inand international lawyers is thenormal mode of operation. We are leading US and London law firmsthe first and remain the onlyindependent Tokyo law firm with * Unique combination of local and foreign expertiseforeign partners, which enables us tooffer our clients the quality ofservice that the modern business * Leading capabilities in Finance, Capital Markets, Corporate, Disputecommunity demands. Resolution and Real Estate * Frequently recognized for expertise, innovation and strategic thinking “… the first truly international domestic Japanese law firm …” Asian Legal Business 2005 16
  17. 17. www.aplaw.jp Address Contacts Fukoku Seimei Bldg For further information about Atsumi & Sakai and how we can help your (Reception 12F) business in Japan, please visit our website at www.aplaw.jp or contact: 2-2 Uchisaiwaicho 2-chome Chiyoda-ku, Tokyo 100-0011 Japan TEL: +81 (0)3-5501-2111 FAX: +81 (0)3-5501-2211 Daniel C. Hounslow WEB: www.aplaw.jp Partner Solicitor admitted in England and Wales (1988)* JR Lines Registered Foreign Attorney (English Law)Six minutes walk from the Hibiya Exit ofShimbashi Station on the JR Yamanote daniel.hounslow@aplaw.jp / +81 (0)3 5501 2118and Keihin Tohoku Lines* SubwaysDirectly connected via Exit #A6 ofUchisaiwaicho Station on the Toei MitaLine; three minutes walk from Exit #C4of Kasumigaseki Station on the Chiyoda Japanese legal advice in this memorandum was provided byand Hibiya Lines; five minutes walkfrom Exit #B2 of Kasumigaseki Station Japanese lawyers (Bengoshi):on the Marunouchi Line • Michiya Iwasaki, Partner (Employment) • Yoshihito Ueno, Counsel (Tax) 17 #210538

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