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Tax News Letter Japan Tax Bulletin 2024 2023 2021 2022
What's New
Diversifying into Japan real estate for a non-resident
International Inheritance Tax Diversifying into Japan real estate for a non-resident
Foreign investors looking to invest in Japan real estate have various options on how to hold the investment.
2 min read | 2025/02/18
Clarifications on Foreign Tax Credit Documentation: Detailed Overview
JAPAN TAX BULLETIN Clarifications on Foreign Tax Credit Documentation: Detailed Overview
Under the 2024 tax reform, the Japanese government strengthened tax credit for salary increase from the perspective of (a) easing the burden on citizens whose wage increases have not kept pace with rising prices, (b) aiming to achieve an economy where wage increases that fully exceed price increases are sustained and (c) supporting efforts to balance work and child-caring and promote the advancement of women. The main points of the revision are the establishment of a new definition called “medium-sized enterprises” and the raising of the tax credit ratio through the establishment of additional deductions for childcare support and the promotion of women's activities.
5 min read | 2025/01/29
Reform of tax credit for salary increase
JAPAN TAX BULLETIN Reform of tax credit for salary increase
Under the 2024 tax reform, the Japanese government strengthened tax credit for salary increase from the perspective of (a) easing the burden on citizens whose wage increases have not kept pace with rising prices, (b) aiming to achieve an economy where wage increases that fully exceed price increases are sustained and (c) supporting efforts to balance work and child-caring and promote the advancement of women. The main points of the revision are the establishment of a new definition called “medium-sized enterprises” and the raising of the tax credit ratio through the establishment of additional deductions for childcare support and the promotion of women's activities.
11 min read | 2024/12/23
Trending articles
JAPAN TAX BULLETIN Reform of tax credit for salary increase
11 min read | 2024/12/23
JAPAN TAX BULLETIN Entertainment expenses
8 min read | 2024/11/26
JAPAN TAX BULLETIN Clarifications on Foreign Tax Credit Documentation: Detailed Overview
5 min read | 2025/01/29
International Inheritance Tax Diversifying into Japan real estate for a non-resident
2 min read | 2025/02/18
Our Insights
Diversifying into Japan real estate for a non-resident
International Inheritance Tax Diversifying into Japan real estate for a non-resident
Foreign investors looking to invest in Japan real estate have various options on how to hold the investment.
2 min read | 2025/02/18
Clarifications on Foreign Tax Credit Documentation: Detailed Overview
JAPAN TAX BULLETIN Clarifications on Foreign Tax Credit Documentation: Detailed Overview
Under the 2024 tax reform, the Japanese government strengthened tax credit for salary increase from the perspective of (a) easing the burden on citizens whose wage increases have not kept pace with rising prices, (b) aiming to achieve an economy where wage increases that fully exceed price increases are sustained and (c) supporting efforts to balance work and child-caring and promote the advancement of women. The main points of the revision are the establishment of a new definition called “medium-sized enterprises” and the raising of the tax credit ratio through the establishment of additional deductions for childcare support and the promotion of women's activities.
5 min read | 2025/01/29
Reform of tax credit for salary increase
JAPAN TAX BULLETIN Reform of tax credit for salary increase
Under the 2024 tax reform, the Japanese government strengthened tax credit for salary increase from the perspective of (a) easing the burden on citizens whose wage increases have not kept pace with rising prices, (b) aiming to achieve an economy where wage increases that fully exceed price increases are sustained and (c) supporting efforts to balance work and child-caring and promote the advancement of women. The main points of the revision are the establishment of a new definition called “medium-sized enterprises” and the raising of the tax credit ratio through the establishment of additional deductions for childcare support and the promotion of women's activities.
11 min read | 2024/12/23
Entertainment expenses
JAPAN TAX BULLETIN Entertainment expenses
The deductibility of entertainment expenses under Japan corporate tax law is a complicated topic. This newsletter explains the deductibility of entertainment expenses in general and also in relation to the special sub-category of entertainment expenses for meals and drinks.
8 min read | 2024/11/26
Focusing on SME Growth Through Enhanced Investment Loss Reserve System
JAPAN TAX BULLETIN Focusing on SME Growth Through Enhanced Investment Loss Reserve System
Japan's commitment to invigorating its small and medium-sized enterprises (SMEs) took a significant step forward with the announcement of the 2024 fiscal year tax reforms. These reforms, part of the Reiwa 6 year plan, focus on expanding the SME Business Reorganization Investment Loss Reserve System. This policy is tailored to empower SMEs to grow through strategic acquisitions and integrations.
1 min read | 2024/10/21
Tax Reform on Determining Taxable Enterprise Under Consumption Tax Law
JAPAN TAX BULLETIN Tax Reform on Determining Taxable Enterprise Under Consumption Tax Law
This article explains the impact of the reform of determining a taxable enterprise for consumption tax purposes on foreign owned domestic enterprise and a foreign enterprise for taxable periods beginning after October 2024, based on the amendments.
1 min read | 2024/09/25
Tax reform on the sized-based business taxation
JAPAN TAX BULLETIN Tax reform on the sized-based business taxation
The size-based business taxation system was introduced in 2004. The size-based business taxation system imposes “a value-added tax” and “a capital-based tax” on companies with stated capital of more than JPY100 million. The taxes are levied even where a corporation is in currently loss position. A value-added tax is levied based on the sum of the distribution of earnings (comprising remuneration and salaries, net interest paid and net rent paid) and profit or loss for a single year, and a capital tax is levied based on the amount of stated capital, capital reserve, other capital surplus etc. as defined by the Corporation Tax Law.
1 min read | 2024/08/07
Pillar One Amount B released by OECD
JAPAN TAX BULLETIN Pillar One Amount B released by OECD
On February 19, 2024, the Organization for Economic Cooperation and Development (OECD) published its final report on Pillar 1 Amount B to simplify and streamline the application of the arm's length principle to baseline marketing and sales activities, with a focus on the needs of countries or regions with low tax enforcement capacity.
1 min read | 2024/07/24
Hometown Tax Donation (Furusato Nozei)
JAPAN TAX BULLETIN Hometown Tax Donation (Furusato Nozei)
Hometown Tax donation (Furusato Nozei) is a system that allows individuals to receive income tax and inhabitant tax deductions for donations made to local governments of their choice. In addition, since the donor can receive return gifts from the recipient local government, the number and amount of such donations have been increasing in recent years attracting more and more attention. This article explains how it works and how the tax amount is reduced.
1 min read | 2024/06/27
Tax Reductions for Residents
JAPAN TAX BULLETIN Tax Reductions for Residents
In accordance with the 2024 Japan Tax Reform, fixed amount of tax credit against National Income Tax and Local Inhabitant Tax will be implemented. This tax credit is a one-time deal and applicable to 2024 National Income Tax and 2024/25 Local Inhabitant Tax payable from June 2024.
1 min read | 2024/05/27
Navigating the New Horizons of Japan's Controlled Foreign Company Regime
JAPAN TAX BULLETIN Navigating the New Horizons of Japan's Controlled Foreign Company Regime
In the ever-evolving landscape of international taxation, the Controlled Foreign Company (CFC) regime has emerged as a critical tool for jurisdictions seeking to curb tax avoidance through the strategic allocation of profits to subsidiaries in low-tax jurisdictions. This article aims to unpack the complexities of the CFC regime, with a focus on the recent amendments in Japan, providing a comprehensive understanding for businesses and tax professionals navigating these changes.
1 min read | 2024/04/24
Taxation of a Nini Kumiai (“NK”), a form of partnership under the Civil Code
JAPAN TAX BULLETIN Taxation of a Nini Kumiai (“NK”), a form of partnership under the Civil Code
An NK is a partnership stipulated in the Civil Code. NKs are sometimes used to design tax shelter products. This bulletin contains an overview of the legal framework of NKs in the Civil Code, tax treatments of NKs, discusses a court case where a judgement was made on a tax shelter structure using an NK and the anti-avoidance rules.
Less than a minute | 2024/03/21
Bad Debt Loss and Bad Debt Allowance
JAPAN TAX BULLETIN Bad Debt Loss and Bad Debt Allowance
A corporation is allowed to deduct monetary claims when they become fully unrecoverable. Corporation Tax Law Basic Circular (“CTLBC”) lists cases where a deduction of monetary claims is allowed.
1 min read | 2024/02/19
Digital Taxation
JAPAN TAX BULLETIN Digital Taxation
On October 8, 2021, it was announced that 136 of the 140 member countries of the OECD/G20 Inclusive Framework on BEPS, representing more than 90% of global GDP, agreed on new international tax rules, which is the Two-Pillar Solution to Address the Tax Challenges Arising from the Digitalisation of the Economy (“digital taxation”). As of November 15, 2023, 140 countries/regions have agreed.This digital taxation consists of “Pillar One” and “Pillar Two” and is a response to the situation where the current principles of international taxation are no longer fully functional as the economy becomes increasingly digitalized.
2 min read | 2024/01/23
Navigating the Challenges of Japan’s New Invoicing System
JAPAN TAX BULLETIN Navigating the Challenges of Japan’s New Invoicing System
The implementation of Japan's new VAT invoicing system on October 1, 2023, has caused significant disruptions, particularly for Tax-Exemption Businesses. In this analysis, we will focus on the impact of the Invoicing System on general VAT taxpayers, with a particular emphasis on foreign enterprises. The complexities surrounding foreign currency transactions and invoicing regulations present unique challenges that demand a thorough understanding of the new system.
1 min read | 2023/12/25
Change in Interpretation of Tax Convention by the National Tax Agency
JAPAN TAX BULLETIN Change in Interpretation of Tax Convention by the National Tax Agency
The National Tax Agency (NTA) in Japan announced on 30 March 2023 a change in interpretation of “the end of the accounting period for which the distribution of profits takes place” under (Article 10, Japan Luxembourg Tax Convention (JLTC)), following a case determined by the Tokyo High Court on 16 February 2023.
1 min read | 2023/11/22
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