The National Diet has passed the proposed 2015 tax reforms and circulated the amended tax laws on 31 March 2015 with minor changes.
- From 1 April 2015, the corporation tax rate will be reduced to 23.9%. The effective rate for large companies is therefore 32.11%.
- The tax rate for small and medium-sized entities remains at 15% on income up to JPY 8 million for the next 2 years. The rate on income exceeding JPY 8 million is set at 19%.
- The amount of loss carry-forward for entities that submitted a blue declaration form, and for entities that incurred losses due to a natural disaster but did not submit a blue declaration form, is restricted to 65/100 of the income before losses or the consolidated income from 1 April 2015 to 31 March 2017, and after 1 April 2017 to 50/100. The relevant documentation must be kept for 10 years.
- The increase in the consumption tax rate to 10% will be postponed to April 2017, and the increase will enter into force regardless of economic assessment.
However, the 2015 Budget also included:
- A deemed exit charge on individuals as part of the income tax revision.
- The National Tax Agency has clarified that the exit charge will apply to individuals leaving Japan on or after 1 July 2015, and that the same exit charge applies to gifts from Japanese residents to immediate family members resident outside Japan.
