What happen if the company pay education costs for the employees, such as seminar, job training, certificates and qualification?
If the education is not necessary for the job performance, the education costs are treated as salaries for the employees. Salaries for employee are deductible expenses of the company but he employees need to pay personal income tax. If the education are for directors, the education costs will not become deductible expenses for the company because directors’ salaries are basically not deductible expenses.
The following education costs are not treated as salaries for employees.
Driver’s license for track driver
Japanese class for foreign employees
The following education costs are treated as salaries for employees.
Driver’s license for in house staff
English class for career change
Tuition for University
To avoid personal income taxation, you need to keep the records, such as receipts and materials for training, to prove that the education are necessary for employees’ job performance.