 |
|
|
|
|
Tax Alert |
|
|
|
Special Tax Measures for Small and Medium Enterprises (“SMEs”) |
|
|
|
|
(Effective from fiscal years beginning on April 1, 2010º) |
|
|
|
|
Following the 2010 tax reform, domestic subsidiaries¹ with paid-in capital of JPY 100 million or less will no longer be eligible for certain special tax benefits previously available for SMEs, if the parent company (and/or the ultimate parent with wholly-owned interest) has paid-in capital² of JPY 500 million or more. Some of the major benefits are: |
|
|
|
| Special Tax Benefits |
Currently |
New |
| Reduced corporate tax rate |
22%³ up to JPY 8 million, 30% thereafter |
30% |
| Exemption from special tax rate applicable to specified family corporations (“DOZOKU KAISHA”) |
Exempted from special tax rate |
Special tax rate of 10% to 20% on excess retained earnings |
| Deductibility of entertainment expenses |
90% deduction was permitted up to JPY 6 million |
No deduction is allowed |
| Carryback of NOLs |
Permitted |
Disallowed |
| Deductibility of bad debt provisions |
Option to select from using prior years’ actual bad debt ratio or the standard industry ratios |
Based solely on prior years’ actual bad debt ratio |
|
|
|
|
|
º Fiscal years beginning on January 1, 2011 for calendar year companies. |
|
|
|
¹ Subsidiaries incorporated in Japan and all of the stock are directly or indirectly held by companies (including foreign companies). |
|
|
|
² NEW "Paid-in capital" excludes additional paid-in capitals and will normally consist of common stock and preferred stock. |
|
|
|
³ NEW For companies with fiscal years beginning April 1, 2010, the rate is18%. |
|
|
|
Please contact distribution@okamoto-co.co.jp for details and/or to schedule an appointment. |
|
|
|
Download Newsletter for printing (PDF,147kB) |
|
|
|
Disclaimer
Website Top Page |
|
