FY 2018 Tax reform: first proposals are in

August is traditionally the season where Japanese ministries hand in their budget requests and which fiscal measures they want to implement to support their policies. Nikkei Online listed up a number of the proposals that have become public in the past weeks.

In general, the business daily is of the opinion that overall reform of income taxation, which was on the forefront the past few years, is off the books for the moment.  Instead the trend is small tweaking, to support mid-term growth, increase of productivity and the way-of-working.

Tags : tax, reform, 2018

Tax outlook 2017

Even though the Japanese fiscal year is underway for less than 6 months, the Japanese government and its ministries have already started this month to publicize their proposals for next year.  Discussions during the last months were dominated by the decision of the Abe government to again postpone the planned increase of the consumption tax to March 2019.

Tags : tax, METI, MLIT, MHLW, 2017

2016 Tax reform round-up

In its drive to stimulate the Japanese economy, the Abe government has introduced various fiscal measures for 2016, most notably the accelerated decrease in corporate tax rates and the introduction of a diversified consumption tax. The upcoming VAT increase to 10% in 2017, is likely to be combined with keeping a lower VAT rate at present 8% for sales of food and drink. Below a round-up of the most important measures for the coming fiscal year. 

National Strategy Special districts more fiscally attractive for businesses

The Japanese Finance Ministry (MOFA) and the Cabinet Office (CAO) announced plans to give companies located in National Strategy Special districts (kokka senryaku tokku)  a 20% tax exemption on their corporate income.  The exemption is limited to newly established companies (within the last five years) designated by the country and those active in the district in areas such as agriculture and medical health.

LDP plan to halve fixed asset tax for capital investments SMEs for three years

Nikkei (J) reports on December 7th that the LDP Tax System Research Council is planning to half the fixed asset taxes (kotei shisanzei) for SMEs for a period of three years, starting in 2016.  The measure would cover purchases by SMEs of new manufacturing or processing machinery or equipment costing more than ¥1,600,000 (approx. €12.000) each and apply to total annual investments totalling more than ¥1 trillion (€7.5 million).

Update taxation plans for 2016

The on-going discussions in the ruling LDP Tax System Research Council are yielding new fiscal reforms for the coming year.  Most conspicuous is the proposal to accelerate the decrease of corporate taxation rate to below 30% next year at 29.97%.  It had been expected that the effective corporate taxation rate would reach the 20% range in 2017. Nikkei Online (J) reports on November 30th on a number of other measures, which are likely to be implemented from April next year. 

Changes to beer and wine taxation planned in 2016

The government coalition is planning to change taxation rates on alcoholic beverages in its tax reform bill for 2016. Currently taxes on wine and Japanese sake are 1.5 higher than lower alcohol beverages. The proposal is designed to make the taxation rates between various kinds of spirit more uniform. It is expected that taxes for low-alcoholic beverages, such as low-malt beer will go up, while regular beer, wine and Japanese sake will see lower rates. 

Government to tighten tax breaks for interest payments to prevent tax evasion multinationals

The Japanese government considering tightening of tax breaks for interest payments by companies to prevent tax evasion by multinational companies making use of differences in taxation systems in countries.


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