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Hometown Tax Donations |
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When a taxpayer contributes more than 5,000 yen to a local government, municipality, the total amount from 1 and 2 below shall be credited against his/her individual inhabitance tax liability. This amendment will be applicable to contributions made on or after January 1, 2009. |
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1, |
(contributed amount - 5,000 yen) x 10% |
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2, |
(contributed amount - 5,000 yen) x ( 90% - marginal tax rate for individual income tax purposes which is applicable to a taxpayer ) |
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Family Corporation Surtax |
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Corporations with paid in capital of up to 100 million yen are now exempt from the family corporation surtax that is imposed on excess retained earnings. This amendment is applicable for tax years commencing on or after April 1, 2007. |
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Housing Loan Credits |
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Many taxpayers will be eligible for a credit arising from a housing loan obtained to purchase his/her residence during 2007 and 2008. The credit will apply up to 15 years. |
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Investment Tax Credits |
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The applicable period has been extended through March 31, 2010. |
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Outline |
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When small and medium-sized companies purchase certain assets, they can choose to take either an investment tax credit (7% of acquisition cost) or additional depreciation (30% of acquisition cost). |
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Assets |
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a |
Machinery and equipment (acquisition cost per unit is greater than or equal to 1,600,000 yen, or the total lease payments are greater than or equal to 2,100,000 yen.) |
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b |
Office equipment and software to make the office more efficient (PC, copy machine, facsimile, scanner, certain software: acquisition cost of equipment are greater than or equal to 1,200,000 yen for a single unit or similar asset group, total lease payments are greater than or equal to 1,600,000 yen, or the acquisition cost of software is greater than or equal to 700,000 yen.) |
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c |
Freight vehicles (gross weight is 3.5 tons or more.) |
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d |
Certain ships |
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Other |
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Although special depreciation is available, investment tax credits do not apply for companies with capital over 30,000,000 yen. |
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Tax Ruling System |
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Under the current tax ruling system, the National Tax Agency ("NTA") provides written responses to taxpayers for tax inquiries on certain transactions, and discloses the contents to the public. As a result of this tax reform, the NTA will not disclose the specific contents and the name of the inquirer. The NTA will provide responses within 3 months of the inquiry, but under the certain condition the announcement may be delayed for up to 180 days. |
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Tax Appeal System |
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According to the administrative appeal examination reform law, any objections (igi mousitate) will now be considered requests for reinvestigation (sai-chosa seikyu). The period for acceptance for reinvestigation by the tax office will extend to 3 months (from 2 months) from the day the taxpayer became aware of the tax disposition. Also, in the past the taxpayer required await of 3 months to request a review to the National Tax Tribunal. Under the new law, the waiting time has shortened to 2 months. |
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Mortgage Loan Interest Deductions |
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If the employer loans funds to an employee for the purchase of a primary residence, if the interest rate charged is above 1%, it is unnecessary to tax the employee on the difference with the market interest rate. This special treatment has been extended for an additional two years. |
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