• Service: Tax, Global Indirect Tax, Global Transfer Pricing Services, Global Mobility Services, International Tax
  • Type: Regulatory update
  • Date: 12/17/2013

Japan - Tax reform proposals for 2014 

December 17:  The Japanese government’s ruling coalition (the Liberal Democratic Party and New Komeito) agreed on 12 December 2013 to an “outline” of tax reform proposals for 2014.

Among the tax measures in the tax reform plan affecting corporations are provisions that would:

  • Reduce the effective corporate tax rate (and repeal the special reconstruction corporate tax)
  • Amend the treatment of certain business-related entertainment expenses
  • Introduce measures for “national strategic economic growth areas” including special depreciation and tax credits for machinery and other investments made in the areas and tax credits for certain R&D costs
  • Change the rules for corporate governance
  • Amend the tax rules for Toushi Houjin (known as “J-REITs”)

Other measures would affect the taxation of foreign corporations by amending the international taxation principle.

Under yet another provision, the sales or purchases of assets, services, and other transactions with related overseas companies—when made through unrelated parties—would be subject to the transfer pricing rules.

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