Topics that shape the future
- Closer look at research results -

In this book, in order to clarify the basic differences in thinking between corporate accounting and taxable income calculations under the Corporation Tax Law, I focus on the gap between the two using taxation cases as material. This book was published in March 2023 with a research grant from the Tax Museum, and at that time I was honored to be selected as a candidate for the Tax Museum Award.
Tax laws and corporate accounting are not valid forever as they were in the past. Every time a new transaction example is devised in economic activity, a new perspective and way of thinking is required. In researching this field, I recognize the need to seek out material in practice and analyze it academically. I believe that my work experience in the government and the questions and knowledge I gained there as the starting point for my research were recognized.

The changes in accounting figures have a significant impact on taxable income calculations, which start from corporate profits under the final settlement principle. Of course, whenever new accounting standards are published, the Corporation Tax Law responds by revising the tax system while determining whether the accounting standards are compatible with taxable income calculations. However, questions must be continually asked, such as whether current corporate profits are capable of bearing tax and whether figures that take into account subjective estimates can be used as the basis for calculating taxable income. I believe that the fundamental issue in research in the field of tax accounting is to what extent taxable income calculations will incorporate the dynamic changes in corporate accounting.

To begin with, accounting and taxes have opposing incentives when it comes to profits. To attract more investment into a company, it is necessary to make profits appear large to investors. On the other hand, when considering tax amounts, the tendency is to want to make profits appear as small as possible. Profits are large as disclosure information, but when filing income tax returns, there is a conflicting desire to make them appear small.
To prevent this, corporate accounting requires the early recording of future expected expenses and losses, and the new accounting standards for revenue recognition prescribe a method of calculating amounts that incorporates the risk of future revenue reductions. On the other hand, taxes place emphasis on legal stability, and require the determination of legal relationships that do not record revenues or expenses based on forecasts or estimates as much as possible. As accounting standards evolve further and attempts are made to take measures that anticipate future risks, it will inevitably conflict with the determinism of taxes.

It is not possible to completely eliminate the difference between the calculation of taxable income based on accounting standards and the Corporation Tax Law, and since accounting and tax have different positions in the first place, I think it is natural that there will be essential differences. However, if the difference between the two becomes larger, practical confusion will arise and it will take a lot of time and money to make adjustments to the calculations to eliminate the difference.
I believe that the current method of calculating taxable income based on corporate accounting, known as the final settlement system, is efficient for Japan's social economy, and that this system should be maintained in principle. I believe that this system can only be operated stably by clarifying the differences and similarities between taxable income calculation and corporate accounting. I believe that this is where the social significance of this research topic lies, and I would like to continue researching this topic.

The research that received this award was done by uncovering and clarifying the differences between taxable income calculation and corporate accounting in light of the famous tax litigation cases that I have experienced, and in terms of its position within my research, it corresponds to a specific theory, so to speak. My future research goal is to summarize the content of this research and theoretically summarize the major framework of the commonalities and differences between the two. If possible, I would like to summarize rules or principles that express the relationship between corporate accounting and taxable income calculation. In some cases, it may be necessary to make proposals with an eye toward legislation.
Ensuring fairness in taxation is the most important theme, and should be called the "lifeline" from the standpoint of enforcement agencies. Currently, aggressive tax planning is seen in companies, particularly foreign-affiliated companies, to skillfully avoid paying taxes, but leaving this unchecked will lead to a decline in awareness of paying taxes. On the other hand, it is also very important that companies that pay taxes properly feel satisfied. I believe that paying correct taxes in a way that companies can be satisfied with will lead to the realization of fair taxation that maintains a sense of fairness for the entire nation, so I would like to further my current research.

For those of you who will be studying accounting and tax in the future, I would like you to have a broad interest in social economics, and if you become interested, you should research it thoroughly and get into the habit of thinking about the significance behind the numbers, the purpose of the system, and how it came about. Repetition of this will surely hone your thinking skills. I believe that Graduate School of Professional Accountancy, where I am a member, can provide a stimulating learning environment that is a well-balanced mix of theory and practice. In order to determine your own career path, I would like you to collect information by looking at literature, attending study groups, and visiting senior students, and use it to help you in the future.