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CEOs and executives pay cuts in response to Coronavirus

SEOs and Executives pay cuts in Japan in response to Coronavirus

Thank you very much for finding this page. Here I would like to inform you that how you can reduce amount of director’s salary in Japan.

If you (Director of your company) are operating your business in Japan and your business situation is not good due to Coronavirus, you may want to reduce amount of your salary.

Basically a company can not change amount of salary during its fiscal year.

If it hopes to reduce director’s salary, it needs to do within 3 months from commencement of its fiscal year.

So if fiscal year of a company is from 1st January to end of December, it needs to reduce amount of salary by end of March.

Otherwise, the company can not use director’s salary as deductible expense.

If your salary can fulfill one of requirements below, your company can allocate your salary as deductible expense (損金).

1) You receive same amount of salary every month.
If you hope to Reduce amount of salary, your company can change it within 3 months from commencement of fiscal year.

2) Your company reports amount of your salary in advance to tax office (Zeimusho)

If you receive bonus from your company, your company needs to report tax office date of payment of your bonus and amount within Four months from fiscal year beginnng.

Other than these requirements, if your company can satisfy conditions below, amount of your salary can be deductible expense.

If business result deteriorated enormously

If business situation of your company deteriorated drastically and your company needs to reduce amount of director’s salary. Otherwise, your company will be closed, your company use this item.

For instance a lady is a director of a company and operating her business. But school of her child suspended its operation and she needs to take care of her child. She can not engage in her business at all. In that case, her company can reduce amount of her salary.

And the company can sum up all her salary as deductible expenses.

Shareholders meeting can determine Reduction of Director’s Salary

When your company is going to reduce amount of Director’s salary, your company needs to make evidence.
(Tax office may request your company to provide it in the future)

So it will make minutes of shareholders meeting.

If you need any assist to make a shareholders meeting minutes in English language, you can contact me at your convenient time.

My email address is akiyama(at)    You can change (at) into @

You can clarify amount of salary and its reason of reduction.