28 Jan 2010

Entertainment expenses in Japan

by Darren

In Japan the tax law limits the allowable deduction your business can claim for entertainment related expenses.

In 2009 the limit is based on the paid-in capital amount of your company. If your business has a capital amount of less than JPY 100 million then the deduction is limited to JPY 5.4 million or 90% of the actual entertainment expense which ever is lower. If your capital is greater than JPY 100 million then entertainment expenses are non-deductible.

Entertainment expenses are defined in Japan to include payments which are for the purposes of reception, entertainment, consolation and gifts. Expenses incurred for eating and drinking which are less than JPY 5000 are not included in entertainment expenses which are subject to the limitation described above. These will be outright deductible.

In order to ensure your business obtains the correct deduction you must ensure that all relevant receipts relating to the expenses are kept and should include the following additional information:

  • Date
  • Number of participants
  • Names of participants

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Previous entry: Entertainment Expenses in the United States


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