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This article introduces the Business Office Tax, which needs to be considered when entities conduct business in offices or workplaces within cities with a population of 300,000 or more.
Starting in 2027, a revised minimum tax regime will apply to certain high-income individuals in Japan. While JPY165 million is used as a calculation threshold, additional tax is only triggered where the minimum tax exceeds the regular income tax liability. The reform is intended to ensure a minimum level of taxation, particularly where a significant portion of income is derived from investment or equity-based sources.
In recent years, international tax authorities have intensified scrutiny of cross-border structures involving low-substance entities, commonly referred to as “paper companies.” Japan is no exception and such structures continue to be examined under existing anti-avoidance frameworks, including the “Controlled Foreign Company (CFC) regime and treaty-based anti-abuse rules.
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.