Consumption Tax Adjustment on the Change of Use of Fixed Assets
JAPAN TAX BULLETINFY2026 JCT Reform Update: Extended 8-Year Transitional Deduction Schedule and Reduced JPY 100M Cap for Non-Registered Supplier Purchases
Contents
It is common that a parent company provides a financially distressed subsidiary with financial support in the form of debt forgiveness, sales price discounts or interest-free loans etc. Such financial support is usually treated as a “donation” for tax purposes and its deductibility for tax purposes is restricted. However, when there are rational reasons for a parent company to support its financially distressedsubsidiary, the support is not treated as a donation and is fully tax deductible.
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