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Japan: Tax relief legislation is passed (COVID-19)

Japan: Tax relief legislation is passed (COVID-19)

The National Diet on 30 April 2020 passed legislation that includes tax and economic measures in response to the coronavirus (COVID-19) pandemic.


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The legislative measures include tax relief, such as:

  • A grace period of one year for tax payments of almost all national tax liabilities of corporate or individual taxpayers with payment due dates between 1 February 2020 and 31 January 2021, provided there has been a 20% decrease in the taxpayer’s revenue for the same period in the prior year
  • Tax refund by application of tax loss carrybacks—expanded for companies with stated capital of JPY 1 billion or less (from JPY 100 million or less)
  • Tax reduction for capital investments with regard to teleworking for small and medium-sized companies
  • Allowance of a charitable (donation) deduction by individuals who forfeited a right to claim a refund of the amount they paid for admissions to a cultural, arts or sporting event that was cancelled because of the pandemic
  • Flexible treatment of the requirements for application of the special deduction available for housing loans
  • Special rules for consumption tax—when sales for a one-month (or longer) period between 1 February 2020 and 31 January 2021 are decreased significantly (50% reduction or more), the selection or cancellation of taxable company status for consumption tax purposes is to be permitted
  • Stamp tax exemption for contracts involving public or private financial institutions

There are also local tax relief measures (such as a grace period for tax collection and reduction of property tax on certain property owned by small and medium-sized entities).

Read an April 2020 report [PDF 99 KB] prepared by the KPMG member firm in Japan

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