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The Labor Standards Act (LSA) includes a deemed working time system for discretionary work under which the working hours of employees engaged in certain duties can be predetermined rather than calculated on the basis of their actual working time. The Ordinance for Enforcement of the Labor Standards Act and a government notification detail the scope of the duties to which the Discretionary Work System can be applied and the relevant procedures.

The Labor Standards Act requires employers to provide clear notice of certain terms of employment set forth under the Ordinance for Enforcement of the Labor Standards Act (“LSA Ordinance”). An amendment to the LSA Ordinance will become effective on 1 April 2024 changing the terms covered by this notification requirement.

The Ministry of Economy, Trade and Industry (METI)’s Carbon Capture and Storage (CCS) Long-term Roadmap Working Committee published its Final Report on the implementation of CCS in Japan in March 2023. This followed the Japanese Cabinet’s approval of the “Basic Strategy for the Realization of GX (Green Transformation)” a month earlier, which stated that legislation and a regulatory framework for CCS should be developed as soon as possible. METI began its deliberations in September 2023, resulting in the publication of its “Draft Interim Summary of the CCS Regulatory Framework” on 15 December 2023. This alert summarizes the clarified Japanese legal regime for CCS projects.

On 29 November 2023, the Cabinet Secretariat of Japan and the Japan Fair Trade Commission jointly issued the Guidelines Concerning Price Negotiation for Appropriate Shifting of Labor Costs (“the Guidelines”). Rapid price inflation has made it particularly important to create a business environment in which small and medium-sized companies can secure resources for wage increases. The Japanese government has been working on price-shifting measures and established the Guidelines as one of its efforts to improve the business environment.

Development and commercialization of innovative products/services — including smart technologies — have recently been accelerating rapidly in the healthcare industry. One example is the growing use of AI/machine learning technologies in medical devices that perform diagnosis and/or testing. Further, many software applications and wearable devices are being launched that enable ordinary consumers to collect health-related data, etc.

In this issue, we focus on the FY2023 Tax Reform Enforcement Order and Enforcement Regulations and the Guidelines on Respecting Human Rights in Responsible Supply Chains.
On the tax side, the Cabinet Order Partially Amending the Order for Enforcement of the Income Tax Act and the Ministerial Order Partially Amending the Ordinance for Enforcement of the Income Tax Act in relation to the 2023 Tax Reforms were published in a special extra (No. 25) of the Official Gazette dated 31 March 2023.