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From October 1, 2023, the qualified invoice preservation method will be introduced as a way of the purchase tax credit of the consumption tax to correspond to the multiple consumption tax rates. Under the method, the preservation of "qualified invoices" issued by "qualified invoice issuers" will be a requirement for the purchase tax credit.
An individual taxpayer liable for income tax is classified as a resident or a non-resident. A resident is an individual who has a domicile or has had a residence continuously for one year or more in Japan. A non-resident is an individual who is not a resident.A non-permanent resident is a resident who does not have Japanese nationality and who has had a domicile or a residence in Japan for not more than five years in total within the past ten years. With respect to income generated from overseas assets (foreign sourced income), such as interests on overseas deposits or dividends of overseas shares, non-permanent residents are taxed when those are either paid in, or deemed to be remitted to Japan. Residents other than non-permanent residents are taxed on worldwide income.
Under the Corporation Tax Acts, where monetary claims such as account receivables, loan receivables etc. become uncollectible, losses on such monetary claims are tax deductible subject to certain conditions. Further, SME1 and certain other corporate taxpayers are allowed to make a tax-deductible provision for bad debt allowance subject to the deductible limitation.
The group tax relief system will be introduced for business years beginning after March 31, 2022, replacing the current consolidated tax return system. Corporate taxpayers that elect to file consolidated tax returns are deemed to elect for the group tax relief system automatically unless they notify the tax office otherwise.
1. Special tax measures for deferral of national tax payments 2. Additional tax measure for extension of the national tax filing deadlines 3. Special tax measures for carried-back losses 4. Special tax credit /special depreciation applicable to capital investment for remote work 5. Other tax measures
Transactions such as export sales are consumption tax exempt as tax rate 0%. 1. Export tax exemption 2. Tax exemption at export shops
Amendments to the basic corporate tax circular s have been announced due to the spread of the new coronavirus infection infection.
In order to improve the consumption tax credit system for purchases of residential rental buildings, the two adjustments below have been in force since April 2020. 1. Restriction of the purchase tax credit for residential rental buildings 2. Adjustment of consumption tax credit for purchases of residential rental buildings
The filing deadline of consumption tax return is within two months after the end of taxation period (a taxation period is basically a financial year of a company) in principle. The tax reform of an extension for consumption tax filing deadline for the companies comes into force after the financial year ended March 31, 2021.
A partnership is a vehicle not used frequently for business activities but rather used for investment activities in aircraft leasing, ship leasing etc. A partnership is formed under the Civil Code and called a Kumiai or Nini Kumiai.
New anti-avoidance rule to prevent the pre-sale dividend stripping of foreign subsidiary investments.
The Tokyo Olympic and Paralympic Games (“the Games”) have been postponed until the summer of 2021 due to the worldwide COVID-19 outbreak. Special tax exemption rules, as provided for in the Act on Special Measures Concerning Taxation, will apply to non-resident athletes, game officials and foreign corporations involved in the Games.
1. Definition of a leasing transaction for tax purposes 2. Treatment of a leasing transaction for Corporation tax purposes. 3. Consumption tax
As the result of the 2018 tax reform, a new salary increase tax credit will apply to fiscal years that begin between 1 April 2018 and 31 March 2021. This new tax credit is designed to assist corporations that invest in new assets and develop human resources.