1. Introduction
From a tax point of view, a lecture fee paid to a university professor who has provided a lecture related to a company’s business is often discussed in terms of withholding income tax when it is paid to non-residents, etc. and tax treaties.
In this News, we will mention cases where the content of lecture fees should be carefully considered in relation to entertainment expenses for tax purposes.
2. Entertainment expenses and lecture fees
Under Japanese Corporation Tax Law, entertainment expenses include entertainment expenses, reception expenses, secret expenses, and other similar expenses which are disbursed by a company to entertain or comfort its customers or suppliers, or to send gifts to them.
However, certain expenses are excluded from the scope of entertainment expenses for tax purposes.
Any expenses which fall under this definition are treated as entertainment expenses. Therefore, when the company pays lecture fees, the following should be noted.
① In cases where the payment of the lecture fee is made to a company (which covers the payment to the professor) and the content of such expenditure falls under the above definition of entertainment expenses, it is treated as an entertainment expense for tax purposes.
② In cases where the payment of the lecture fee is made to a company and the content of such expenditure is about information provision based on the pre-concluded agreement between companies and other related matters, it is treated as an expense other than an entertainment expense for tax purposes.
In cases where a company pays a lecture fee directly to a university professor, in addition to the above treatment, remuneration/fees paid to the professor is subject to withholding income tax.
3. Conclusion
In this News, we mentioned the treatment of lecture fees.
Please note that this News only introduces general outlines and does not include professional advice. So please make sure not to make any decisions without taking professional advice individually. If you have any questions, please feel free to contact us below.
(References / in Japanese)
National Tax Agency
Scope of Entertainment Expenses
(Accessed on September 27, 2024)
No. 2792 Remuneration and Fees That Should Be Withheld at Source
(Accessed on September 27, 2024)
No. 2795 Payment of Manuscript Fees and Lecture Fees
(Accessed on September 27, 2024)
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