1. Introduction
Due to the spread of coronavirus disease, many companies in Japan are arranging employees to work from home and introducing homeworking allowance to cover electricity and internet access charges. In line with such changes in a work environment, the National Tax Agency (NTA) released answers to the frequent asked questions (FAQs) regarding “tax issues on homeworking expenses (withholding income tax)” on 15 January, 2021. In the FAQs, you can find the method of settling the electricity and internet access charges incurred as a result of working from home.
2. Seven topics from FAQs
1. Homeworking allowance
2. Provision of office supplies and equipment from employers
3. How to settle the work-related household expenses
4. How to calculate the work-related portion of internet access charge
5. Example of the calculation for the work-related portion of internet access charge
6. How to calculate the work-related portion of electricity charge
7. Rental office
3. How to calculate the work-related portion of household expenses
While homeworking allowance to employees is in principle subject to income tax, the following case of calculating the actual expenses incurred through working from home is not taxable.
・Internet access charge
The work-related portion of the basic charge and usage charge for internet access
= The basic charge and usage charge an employee owes of the month x the number of homeworking days of the month / the number of days of the relevant month x 1/2
・Electricity charge
The work-related portion of the basic charge and usage charge for electricity
= The basic charge and usage charge an employee owes of the month x the floor space of the room the employee uses for work / the floor space of the house x the number of homeworking days of the month / the number of days of the relevant month x 1/2
4. Conclusion
In this News, we mentioned “tax issues on homeworking expenses” from the FAQs released by the NTA. 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.
(Reference / Japanese)
National Tax Agency FAQs regarding tax issues on homeworking expenses
Query on the phone+81-3-6821-9455