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Home Leave Benefit
Posted: Tue Mar 05, 2024 6:51 am
by madmick
I have a question regarding the taxation of a home leave allowance, and I'm wondering if anyone here has any insights or experiences they could share.
My employment package here in Tokyo includes a bi-annual flight home. There are 2 options:
1. Buy ticket and get reimbursed from employer (apparently this is not subject to personal tax)
2. Receive a cash benefit option from employer (told this is subject to tax)
My questions:
1. Receiving a cash benefit and using the money to buy a ticket home... why would this be subject to tax if the former option of buying and getting reimbursed is not. It is still after all travel home?
2. Has anyone received a home leave allowance, and if so, how did it affect your tax situation?
If you have any resources or articles that could shed light on this matter, I would very much appreciate if youncould share them.
Thank you in advance for your time and any insight.
Re: Home Leave Benefit
Posted: Tue Mar 05, 2024 7:45 am
by captainspoke
madmick wrote: ↑Tue Mar 05, 2024 6:51 am
I have a question regarding the taxation of a home leave allowance, and I'm wondering if anyone here has any insights or experiences they could share.
My employment package here in Tokyo includes a bi-annual flight home. There are 2 options:
1. Buy ticket and get reimbursed from employer (apparently this is not subject to personal tax)
2.
Receive a cash benefit option from employer (told this is subject to tax)
My questions:
1.
Receiving a cash benefit and using the money to buy a ticket home... why would this be subject to tax if the former option of buying and getting reimbursed is not. It is still after all travel home?
2. Has anyone received a home leave allowance, and if so, how did it affect your tax situation?
If you have any resources or articles that could shed light on this matter, I would very much appreciate if youncould share them.
Thank you in advance for your time and any insight.
Those are slightly different things.
In the one case, you've been paid cash, and whether you buy a ticket home or anything else is up to you. =taxable
If you bought a ticket and are reimbursed, you've presumably submitted some receipts for that, which the employer can use when they do their taxes.
Re: Home Leave Benefit
Posted: Tue Mar 05, 2024 1:31 pm
by Tkydon
madmick wrote: ↑Tue Mar 05, 2024 6:51 am
I have a question regarding the taxation of a home leave allowance, and I'm wondering if anyone here has any insights or experiences they could share.
My employment package here in Tokyo includes a bi-annual flight home. There are 2 options:
1. Buy ticket and get reimbursed from employer (apparently this is not subject to personal tax)
2. Receive a cash benefit option from employer (told this is subject to tax)
My questions:
1. Receiving a cash benefit and using the money to buy a ticket home... why would this be subject to tax if the former option of buying and getting reimbursed is not. It is still after all travel home?
2. Has anyone received a home leave allowance, and if so, how did it affect your tax situation?
If you have any resources or articles that could shed light on this matter, I would very much appreciate if youncould share them.
Thank you in advance for your time and any insight.
If you go on a legitimate business trip, and extend the trip around your home leave, then the company can claim the trip expense for the business trip as a legitimate business expense and reimburse you.
Otherwise, the benefit is considered 'Payment in Kind' for services performed in Japan, and as such is taxable as salary.
Re: Home Leave Benefit
Posted: Wed Mar 06, 2024 2:42 am
by madmick
Seems pretty clear. Thanks for the feedback.