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Japan's Corporate Tax ReductionDecember 2010 The Japanese prime minister Naoto Kan ordered on December 13 a 5% reduction of the corporate tax in the next fiscal year according to Bloomberg. Currently the Japanese corporate tax , including local taxes, is around 40% well above the rate in other countries. The cutting of the corporate tax rate by 5% is the first step in Japan's effort to create an attractive investment environment. The tax cut will force Japan to find alternative resources to fill the expected revenue gap, e.g. by widening the corporate tax basis. Japan's Cigarettes Tax HikeOctober 2010 Japan imposed on October 1, 2010 a record 40% tax on cigarettes. The price of a popular pack of 20 cigarettes was raised by 100 yen, from the previous 300 yen to a new 410 yen . The new tax is aimed to encourage Japanese to quit smoking. The government aims to further increase the price of a pack to 700 yen, similar to the price in Europe and the U.S. Japan Switzerland Revised DTAMay 2010 Japan and Switzerland signed on May 21, 2010 a new protocol amending the existing DTA, double tax treaty, between the two countries. The new protocol includes provisions on exchange of tax information in accordance with the OECD model and reduction/exemption in certain withholding taxes compared to the previous DTA. e.g. payment of dividend to a company holding at least 10% of the voting rights (previously 25% holding) will be subject to 5% withholding, compared to the previous 10% withholding rate. More info :www.efd.admin.ch Japan's Stimulus PackageApril 2009 Japan's prime minister Taro Aso announced on April 10, 2009 a new historic $ 150 billion (Yen 15 trillion ) stimulus package. The new plan follows two previous stimulus packages totalling Yen 12 trillion. Presently Japan faces its worst recession since World War 2, mainly due to the sharp decline in exports to the U.S. The new package which has to be approved later in April includes, inter alia, benefits granting a $ 2,500 bonus to people trading old cars 13 years or more, benefits towards unemployment, companies in crisis, infrastructure, health and welfare. The prime minister also supports dramatic tax reforms, including increase of the consumption tax. Japan Australia Double Taxation Treaty- New Double taxation AgreementAugust 2007 Japan and Australia agreed to revise the double taxation treaty, already existing for 38 years. The revised treaty would reduce withholding taxes, mainly inter company dividends and interest. The revised treaty is expected to improve the investment relationship between the 2 countries. The new treaty has yet to be approved by the parliments in Japan and Australia. Japan and UK New Double taxation AgreementOctober 2006 On 12.10.2006 the new double taxation agreement between Japan and the UK entered into force. Japan Social SecurityJuly 2005 Japan and The U.S. signed a double social security tax agreement, effective 1.10.2005. According to the treaty credits from both countries could be combined together. The tax on the same income would be paid in one country only. Japan Income TaxApril 2005 From 1.4.2005 companies can get a tax credit for training expenses. The credit is 10% of the company's corporate tax,or 20% of the increase of the training expense compared to the average expense in the last 2 years,whichever is smaller. |
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