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Monday, May 7, 2012

The Only Way to "Write-off" the Entertainment Expense

Only few Nations allow companies to simply include their Entertainment Expenses. As a general rule, it should not be the "deductible" on the tax in Japan.

It is persuasive in the logic of governor saying;
  • Must tax for every economic benefit.,or
  • It's unfair that taxing less corporate taxes on the companies often spending on useless matters.

However, We cannot say it's always a rational system, because "judging if it is entertainment expense or not" is tiresome, and the "Tax calculation" is complicated.

From the BPM (Business Process management) point of view, it's not few cases to simplify the company's system to smoothen the process through in-house. In my personal opinion, National system should apply the directivity for labor saving on paperwork with IT. That is, now is the time for driving great simplification force on Tax system.

More specifically, I want the nation to show the directivity of abolishing the income tax (taxpayer and who bears are the same) that is a direct tax which is extremely difficult to calculate and to capture, and focus on the indirect tax that is the high rates of payments automation.

  • a. Indirect taxation to the public utility charges which is more efficient in settlement procedure, and to be suppressed. (electricity, water, etc. )
  • b. Commensurate indirect taxation on legalizing gambling and adult entertainment businesses.
  • c. Strengthening of indirect tax to luxury goods such as gasoline, alcohol and tobacco.

(Oops, I am introducing the business template...)
Here I introduce you a Workflow in which let an employee application in beforehand of 'entertainment', and if necessary, give the employee a lecture for expenditure, to include the entertainment fee as 'Expense' anyhow.

[Application for Entertainment Expense]



The point is that important thing about Entertainment expense is 'Preliminary consultation'.
For the Accountant, they would advice that spend less than 5000 JPY per person, the price they can apply so-called '5000 JPY Standard'. Also, considering the total amount for concerning period, they might request them to put the expense to the next period.

By the way, I really think those companies wonderful, the 'companies remain visible for anyone' this kind of information.

[Application for Entertainment Expense [2. Approval on Entertainment Expense] screen]


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