Recently, Governments of Japan agreed on “outline” of tax reform proposals for 2014. On 12 December 2013 among the tax measures in the tax reform plan affecting corporations are provisions that would:
• Decrease the current corporate tax rate (and repeal the special reconstruction corporate tax);
• Modify the dealing of certain business-related entertainment expenses;
• Announce measures for “national strategic economic growth areas” including special depreciation and tax credits for machinery and other investments made in the areas and tax credits for certain R&D costs;
• Modification the rules for corporate governance; and
• Amend the tax rules for “Toushi Houjin” known as “J-REITs”.
However another provision, the sales or purchases of assets, services, and other transactions with related foreign companies would be subject to the transfer pricing rules.
