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Japan: Tax agency’s FAQs about tax relief for corporations, individuals (COVID-19)

Japan: Tax agency’s FAQs about tax relief

The National Tax Agency in April 2020 released amendments to prior administrative guidance and a set of “frequently asked questions” (FAQs) concerning tax relief measures provided in response to the coronavirus (COVID-19) pandemic.

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The tax relief guidance addresses the treatment, for corporation tax purposes, of certain actions in transactions between business entities—such as forgiveness of trade receivables or the provision of low-interest loans—when there are financial difficulties related to the pandemic. 

The FAQs address procedures for the extension of tax return filing and tax payment due dates for corporation tax, local corporation tax, and consumption tax in response to the pandemic. Specific FAQs provide examples of qualified and non-qualified tax losses for purposes of the tax loss carryback rule, and also address the tax treatment of costs paid by companies in response to the pandemic (e.g., the costs of companies providing face masks to workers). There are FAQs also providing instructions concerning the treatment of reductions of directors’ compensation in response to business downturn. Separate FAQs address procedures for individual taxpayers with regard to extensions of tax return filing and tax payment due dates regarding individual income tax, gift tax, and individual consumption tax.


Read an April 2020 report [PDF 113 KB] prepared by the KPMG member firm in Japan

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