miércoles, 13 de abril de 2016

Tax reform enacted in Japan

On 29 March 2016, Japan’s National Diet enacted the 2016 tax reform proposals, which include the following major corporate tax changes:

  • The standard effective corporate income tax rate is reduced to below 30%, specifically, to 29.97% for fiscal years beginning on or after 1 April 2016 and to 29.74% for fiscal years beginning on or after 1 April 2018. Additionally, there will be a further expansion of the factor-based enterprise tax and a broadening of the tax base through the revision of the depreciation system and other measures.
  • The limitation on the utilization of net operating losses (NOLs) was reduced from 80% to 65% in the 2015 tax reform, and will be further limited to 60% for fiscal years beginning on or after 1 April 2016, 55% for fiscal years beginning on or after 1 April 2017 and 50% for fiscal years beginning on or after 1 April 2018.
  • The extension of the NOL carryforward period from nine years to 10 years, which was determined in the 2015 tax reform, will be deferred for one year to fiscal years beginning on or after 1 April 2018.
  • The consumption tax rate will be increased to 10% and a multiple-rate system under which a lower rate of 8% is applicable to food and beverages will be implemented on 1 April 2017. A qualified invoice system will be introduced on 1 April 2021. 
Source: Deloitte

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