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Japan: Outline of tax reform proposals; measures concerning corporate and individual taxpayers

Japan: Outline of tax reform proposals

The ruling coalition in December 2019 agreed to an outline of tax reform proposals relating to corporate, international tax, consumption tax, and the taxation of individuals. Details of the measures are expected when the actual bills are introduced.


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Included in the outline of the tax reform proposals are corporate tax measures including:

  • Amendments to the Japanese group relief system, to replace the consolidated tax return filing system and special measures for promoting open innovation
  • Restrictions on eligible companies for special tax measures tax credits for acceleration of wage increases and capital investment
  • Measures concerning the treatment of entertainment expenses
  • Special measure for promoting investment in in 5G technology
  • Business tax system for companies conducting the supply of electricity

Also included in the outlined proposals are the following measures relating to international taxation:

  • New tax rules to prevent tax avoidance from tax losses created from the transfer of shares in a subsidiary following dividends received from a subsidiary
  • Controlled foreign company (CFC) regime rule changes
  • Foreign tax credit amendments
  • Earnings stripping rules

Read a December 2019 report [PDF 405 KB] (22 pages) prepared by the KPMG member firm in Japan

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