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Japanese business newspapers reported this week about the first concession in the public sewage systems sector to be given to a consortium of private companies, including French water treatment giant Veolia.

The Tokyo Metropolitan Government (TMG) will enter talks with the Ministry of Internal Affairs and Communications (MIC) for a review of its procedures for assessing buildings to determine fixed assets tax. It will look into changing the current method to determine the costs of assets into a simpler method in order to give business owners a quicker insight into their tax liabilities. The aim is that MIC will change the evaluation standards, and introduce the simpler method nation-wide from 2020.

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.

Nikkei (J) reports on December 7^th 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).

As part of its tax policy for 2017, the Japanese government  plans to revise the tax system that givies preferential treatment to SMEs. Currently, companies with a capital smaller than 100 million yen (€721,000) enjoy lower tax rates. Much larger companies Japanese companies have enjoyed preferential tax rates by keeping their capital base small. This loophole was thrust in the limelight, when struggling electronics giant, Sharp was reported to consider its capital to under the 100 million threshold to enjoy a more favourable tax climate, reserved for SMEs.

Presently, company which have business facilities in multiple prefectures pay their corporate enterprise tax (houjin jigyouzei) in accordance with established “pro rata standards”  in each of the prefectures they are located. 

The Japanese government has announced it will relax the rules for foreigners who want to set up a company in Japan. 

On December 30, 2014 the ruling coalition of Liberal Democratic Party (LDP) and Komeito published their outline of their tax reform for 2015 with the expectation the Cabinet will approve the plan in January 2015. Given the solid majority the coalition enjoys in Parliament, the plan is likely to be implemented unaltered in the new fiscal year, starting in April. 

 The main points of the plan are as follows: