(July 30, 2015)

On July 30, 2015 a pamphlet titled: “FY 2015 Japan Tax Reform” was published on the website of the Japanese Ministry of Finance. According to the pamphlet “it compiles an outline of the Act Partially Amending the Income Tax Act, etc. (Act No. 9 of 2015) in an easy-to-understand manner (the Act Partially Amending the Income Tax Act, etc. was approved and enacted on March 31, 2015).

 

The pamphlet is divided in 6 Chapters and discusses a.o. the following subjects:

 

1.      Corporate Taxation 

I        Pro-growth corporate tax reform

(1)   Reduction of the corporation tax rate

(2)   Broadening the tax base

(i)      Revision of the deduction of loss carried-forward

(ii)    Revision of exclusion of dividends received, etc. from gross profits

·        Expansion of pro-forma standard taxation

·        Consideration for changes in tax burden

·        Consideration for wage hikes in pro-forma standard taxation

(iii)   Revision of special tax measures

·        Revision of the R&D tax system (based on total amount of experiment and research expenses)

·        Revision of other special tax measures

(3)   Consideration for wage hikes

II      Creation of a tax system for strengthening local business facilities

·        Creation of special depreciation or tax credit

·        Expansion of the employment promotion tax system

 

2.      Consumption Taxation

I        Change in the implementation date of the consumption tax hike to 10%

II      Expansion of the consumption tax exemption system for foreign tourists

III    Revision of consumption taxation on cross-border supplies of services

IV     Revision of taxation on automobiles

 

3.      International Taxation

I        Revision of foreign dividend exclusion system

II      Implementation of information reporting system regarding financial accounts held by non-residents

 

4.      Development of the Environment for Tax Payment

I        Obligation to attach documents for deduction for dependents residing overseas

II      Revision of the detailed statement of assets and liabilities

 

5.      Individual Income Taxation

I        Expansion of NISA (tax exemption for dividends and capital gains arising from small investments in listed shares, etc. managed in special tax exempt accounts)

II      Introduction of special provisions for taxation on capital gains at the time of moving out from Japan

III    Extension of the application period for housing loan tax credit, etc.

 

6.      Property Taxation

I        Extension and expansion of gift tax exemption related to funds for housing acquisition, etc.

II      Creation of a gift tax exemption measure for onetime cash gift related to marriage and childcare

 

Click here to be forwarded to the pamphlet as available on the website of the Japanese Ministry of Finance, which will open in a new window.

 

 

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