【超重要】役員報酬優先して法人税を節税する？それとも会社にお金を残す？本当はどっちがいいのか、解説します。

Summary

The video script discusses the intricacies of executive compensation and corporate profit retention in the context of tax planning and business succession. The speaker, a tax accountant named Sugahara, addresses common questions about whether it's better to take a higher salary or leave profits within the company for tax benefits. Sugahara explains the tax rates for individuals and corporations, highlighting the importance of considering both short-term tax savings and long-term financial health. He emphasizes that while taking a higher salary can be beneficial due to lower personal income tax rates, retaining profits within the company can lead to increased stock value and financial growth, which is crucial for business expansion and succession planning. The video also touches on the potential drawbacks of retaining too much profit, such as higher taxes in the future and the impact on personal wealth accumulation. Sugahara concludes by advising viewers to consider their long-term goals and the direction of their companies when deciding on executive compensation and profit retention strategies.

Takeaways

• 📈 **Retaining Profits vs. Executive Compensation**: When considering the future of the company, it's important to balance between taking high executive compensation and retaining profits within the corporation for potential tax benefits and company growth.
• 💼 **Tax Implications**: There is a clear difference in tax rates for individuals and corporations. Understanding these differences is crucial for financial planning, as it can significantly impact the net income from executive compensation.
• 🏢 **Company Growth**: Retaining profits within the company can be beneficial for reinvestment and growth, potentially increasing the company's value and stock price over time.
• 💰 **Asset Management**: The speaker suggests prioritizing taking as much compensation as possible for personal asset management, even if it means higher taxes, with the intent of recouping the tax amount through investment strategies.
• 🔄 **Tax Recovery**: Despite higher taxes, the potential for increasing personal assets through smart financial management can outweigh the tax burden, positioning the individual for greater financial security.
• 🚫 **Limitations on Executive Compensation**: There's a mention of a 'borderline' figure of 900 million yen for executive compensation before taxes increase significantly, which is a strategic consideration for tax planning.
• 📉 **Impact on Stock Value**: Retaining too much profit can lead to increased taxes on the company, which might not be as beneficial in the long run, especially when considering the company's stock value and future transactions.
• ⏳ **Long-term Considerations**: The decision on whether to take compensation or retain profits should take into account long-term goals, such as business succession, market opportunities, and personal financial health.
• 🧮 **Calculating Tax Deductions**: Understanding the various tax deductions available, such as social insurance and basic exemptions, is essential for calculating the actual tax burden and making informed decisions.
• 🔗 **Business Succession Challenges**: Retaining high profits in the company can lead to significant tax implications during business succession, potentially affecting the company's valuation and the ease of transferring ownership.
• 🛠️ **Reinvestment in the Company**: For those aiming to scale up their business significantly, reinvesting profits into the company for growth and expansion might be more beneficial than taking high compensation.

Q & A

What is the main topic discussed in the transcript?

The main topic discussed in the transcript is the strategy for determining the appropriate amount of executive compensation versus retaining profits within a company, considering tax implications and long-term business goals.

Why might a company choose to retain profits rather than paying them out as executive compensation?

A company might choose to retain profits to avoid higher tax rates, reinvest in the business for growth, or increase the company's stock value which can be beneficial for future business succession, mergers, or acquisitions.

What is the significance of the 900 million yen threshold mentioned in the transcript?

The 900 million yen threshold is significant because it is a point at which the personal income tax rate increases from 33% to 43% in Japan. Keeping executive compensation below this threshold can be a tax-saving strategy.

How does the tax rate for corporations compare to that of individuals in Japan?

The corporate tax rate in Japan is relatively lower and more stable compared to the progressive personal income tax rate. For example, the corporate tax rate increases from 23% to 33% when profits exceed 800 million yen, whereas individual income tax rates can go as high as 55%.

What are some factors to consider when deciding between taking higher executive compensation and retaining profits within the company?

Factors to consider include current and projected company profits, personal financial needs, long-term business goals, potential tax implications, and the company's growth and investment plans.

Why might a company choose to pay out more in executive compensation rather than retaining profits?

A company might choose to pay out more in executive compensation to reward key personnel, motivate employees, or because the company's growth and investment needs are already met or can be financed through borrowing rather than retained earnings.

What is the potential downside of retaining too much profit within a company?

Retaining too much profit can lead to higher corporate taxes, a reduced incentive for employees if executive compensation is low, and potential issues during business succession due to increased valuation and associated taxes.

How does the concept of 'gift tax' come into play when considering business succession and transferring company shares?

When transferring company shares as part of business succession, especially if done as a gift, the transferor may be subject to gift tax, which can be substantial, reducing the net value received by the successor.

What is the speaker's recommendation for companies that are not aiming for an IPO?

The speaker recommends that for companies not aiming for an IPO, it might be better to take more in executive compensation rather than retaining profits, considering the potential tax implications during business succession.

What is the importance of considering both short-term and long-term goals when deciding on executive compensation?

Considering both short-term and long-term goals is important because it helps balance immediate financial needs and incentives with the company's future growth, tax planning, and business succession strategies.

How does the speaker suggest approaching asset management for individuals with high income?

The speaker suggests that individuals with high income should focus on asset management to increase their personal wealth, even if it means paying higher taxes, as the return on investment can offset the tax burden in the long run.

What is the implication of the speaker's view on borrowing for investment purposes?

The implication is that instead of retaining profits for investment purposes, companies and individuals can consider borrowing from banks to finance investments, which may be more tax-efficient and allows for greater distribution of profits.