Amendments to the local taxation on corporations in Japan were scheduled to be effective when the consumption tax rate increase went into effect. Given that the Japanese Diet on 18 November 2016 passed bills to postpone the consumption tax rate increase until October 2019, the timing of the pending changes to the local taxation of corporations is also postponed to October 2019.
The local taxation measures affected, and that will apply to fiscal years beginning on or after 1 October 2019 (instead of 1 April 2017) include:
In general, these changes will revise the proportions between two types of tax—the special local corporation tax vs. the business tax, and the local corporation tax vs. the prefectural and municipal tax—but are not expected to affect the total tax burden of corporate taxpayers.
Read a November 2016 report [PDF 236 KB] prepared by the KPMG member firm in Japan: Bills to postpone consumption tax rate increase—passed
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