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Newsletter No.29 < Information < Top Page

Fall Newsletter (No. 29) as of September 30, 2015

Taxes
Individual Income Taxes
Payroll
Update on Social Insurance Rates
Other Amendments to Social Insurance
My Number
Things to Prepare
Issues to Note
Cloud-Based System for Collecting/Managing Employees' Personal Information
Disclaimer

Taxes

Individual Income Taxes

Dependency Deductions for Overseas Family Members
From January 1, 2016, employees who want to claim a non-resident family member (a family residing outside Japan) as a dependent for individual tax purposes are required to submit or present documents that prove the family relationship (*1) and also funding of living expenses to the dependent (*2).
(*1) Documents proving a family relationship
Documents must be either (1) or (2) below.
(1) A copy of the supplementary family register or documents issued by a national or local government that prove that the non-resident is a resident’s family member, and a copy of passport of the family member residing outside Japan
(2) Documents issued by a foreign national or local government that prove the family member is residing outside Japan is a resident’s family member (documents must include the non-resident family member’s name, address and birth date.)
(*2) Documents supporting the funding of living expenses to the dependent
Documents must be (1) or (2) below for the year and proving the wiring was made as needed to provide for living or education expenses for a family member residing outside Japan.
(1) A copy of the supplementary family register or documents issued by a national or local government that prove that the non-resident is a resident’s family member, and a copy of passport of the family member residing outside Japan
(2) Documents issued by a foreign national or local government that prove the family member is residing outside Japan is a resident’s family member (documents must include the non-resident family member’s name, address and birth date.)
If the documents that prove a family relationship or funding of living expenses to the dependent are written in foreign languages, a translation needs to be attached.

Payroll

Update on Social Insurance Rates

Effective September 2015, the welfare pension insurance rates have increased as follows:
Employer contribution – from 8.737% to 8.914 %
Employee contribution – from 8.737% to 8.914 %
These rates increases were pre-approved and such rates are expected to continue to rise by 0.177% until reaches 9.15% for both employer and employee in 2017.

Other Amendments to Social Insurance

1. Increase of ceiling
From April 2016, three more standard monthly remuneration categories will be added (1,270,000 yen, 1,330,000 yen and 1,390,000 yen) on top of the current highest category of 1,210,000 yen.
The ceiling for annual standard bonus amounts for health insurance (bonuses above the ceiling will be exempt from insurance premium) will be raised from 5,400,000 yen to 5,730,000 yen.
2. From April 2016, the calculation method of standard daily remuneration for accidents and sickness benefits and maternity benefits will change.
3. Relaxation of social insurance enrollment conditions for part-time employees
From October 2016, social insurance enrollment conditions for part-time employees will be relaxed from the current rules (initially for large companies with 501 and more employees). Following the revisions, the maximum annual salary permitted to remain as a dependent has decreased from 1.3 million yen to 1.06 million yen.
For employees who have spouses working part-time at large companies may no longer be able to claim their spouse as a dependent.

My Number

In the previous newsletter (No. 28), we discussed documents that will require "My Number", the individuals required to collect "My Number", as well as pending issues. In this newsletter, we would like to focus on matters to prepare for and be careful of as a business operator (i.e. employer).

Things to Prepare

1. Identify person(s) in-charge of "My Number"
2. List out where and when "My Number" is to be used
3. Confirm time schedule of "My Number" implementation
4. Prepare "My Number" policies and rules
5. Develop procedures in collecting "My Numbers" and procedures to confirm individual's personal identification and "My Number" (including procedures to confirm dependents)
6. Consider safekeeping measures and protection
7. Provide internal training to employees on how "My Number" documents will be treated

Issues to Note

1. Person(s) in-charge of "My Number" A manager responsible for "My Number" or administrative staff (persons in-charge of "My Number") needs to be identified. Persons in charge of "My Number" will normally be HR personnel, persons in general affairs, or even company representatives depending on each company’s size.
2. Purpose of use "My Number"
Purpose of use "My Number" needs to be identified and clearly notified to employees, etc. Use of "My Number" for other purposes than those specified to employees is prohibited.
3. Individuals requiring the collection of "My Number" Employees (including directors, part-time workers) and dependent family members, payments for professional fees, payments for real estate rentals and dividend payments
4. Documents that require "My Number"
(1) Taxation
Certificate of income tax, annual salary report, vendor statements and other from submissions on or after January 1, 2016
(2) Employment insurance
Application of employment insurance from submissions on or after January 1, 2016
(3) Health insurance and pension insurance
Application of health/pension insurance from submissions on or after January 1, 2017
5. "My Number" policies and rules
The following two internal documents need to be prepared:
(1) Basic policies for proper handling of "My Number."
(2) Rules for proper handling of "My Number"
6. Verification of "My Number" for employees Verification needs to be performed by either (1) or (2) below.
(1) My Number Card → Personal identification and confirmation of My Number can be performed simultaneously.
(2) Without My Number Card→ Use of a driver license or passport for personal identification and Notification Card of My Number or residency certificate (with My Number imprinted)
Note: My Number Card can be used as official personal identification. You need to apply for it by mail or online after receiving your notification card.
7. Maintenance of "My Number"
Documents including "My Number" can be kept as long as required for stipulated administration procedures.
Documents including "My Number" must be deleted or destroyed when statutory periods of keeping records are past or they are no longer going to be used.
8. Safekeeping of documents
To protect privacy, security management such as documents including "My Number" are to be stored where only persons in-charge of "My Number" are able to access (i.e. cabinet with key, antivirus software, password access) and destroy documents with a paper shredder are expected. "My Number" is to be strictly managed and is more important than other personal information.
A memorandum of proper handling of "My Number" will need to be entered into with our clients before we start collecting your employees' "My Number". Our engagement management will be approaching each client in the coming months.

Cloud-Based System for Collecting/Managing Employees' Personal Information

Okamoto & Company has recently developed a cloud-based system ("Employee Profile System") to collect and manage personal information for our client's employees.
This system is a replacement of our current paper form called, "Notification for new employee" and we will collect and manage other employee data as well as "My Number" in this system centrally. Maintaining data in the system will be in compliance with local laws and allow data to be kept online with appropriate security.
There will be a demonstration of the system during the office manager seminar.

Disclaimer

This newsletter is for private circulation only. Although care has been taken in the preparation of this document, contents have been highly summarized and it may contain errors and/or ambiguities for which we cannot be held responsible. If you are concerned about a specific issue, we recommend you seek professional advice. The material contained in this newsletter may not be reproduced in whole or in part by any means, without the permission of Okamoto & Company, Hiroko Hanato CPTA Office, Michiya Akuzawa CPTA Office or Fumihisa Shimono CPTA Office.
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