Category Taxation in Japan

Japan To Access Tax Evades Computers and Emails

October 10, 2016 Taxation in Japan

Tax evadersTOKYO – The digital barrier used by Japanese tax evaders to hide from tax authorities may soon be coming down, as a new rules will soon be set out to grant tax inspectors power to inspect digital records.

By the end of the month the Ministry of Finance of Japan is set to release proposed new legislation allowing tax authorities to access digital records kept on the computers of alleged tax evaders.

Currently tax legislation in Japan does not explicitly allow tax authorities to conduct overnight raids on alleged tax evaders, or seize the digital data stored on the computers and servers of alleged tax evaders.

Under the scope of the expected rules, tax inspectors will be allowed to copy and utilise the data stored on the evader’s digital devices.

Further, tax authorities will be eligible...

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Fitch Warns Japan of Possible Downgrade Following Tax Delay

June 14, 2016 Taxation in Japan

Consumer spending in JapanTOKYO – Japan’s decision to delay its hike to the rate of sales taxes could lead to a downgrade in its credit rating.

On June 13th the international ratings agency Fitch Ratings announced that it has decreased its outlook for the sovereign debt of Japan, due to the government’s decision to delay the implementation of a hike to sales taxes.

It was stated that the planned hike to the rate of sales tax was a fundamental element of the country’s fiscal consolidation plan, and its delay now puts the government commitment to the consolidation into doubt.

While the government of Japan claimed that it would take steps to shore up the tax revenues lost due to the delay of the tax hike, it gave no indication of what the measures may be or when they would be implemented.

Fitch has not yet downg...

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Japan Needs to Drop Bitcoin Tax

March 2, 2016 Taxation in Japan

TOKYO – Japan’s tax treatment of crypto-currencies is forcing consumers to buy digital coins from overseas in order to skip their tax obligations.

Ongoing controversy on the taxation of Bitcoins in Japan has come to a head, with calls being made for the digital currency to be exempt from consumption tax.

Bitcoins, and all other crypto-currencies, currently fall within the scope of the national 8 percent sales tax, if purchased with Yen from a local exchange.

If Japanese consumers purchase coins from overseas dealers, then they are liable to pay tax on the import, however due to the digital nature of the currency the national tax authorities have no means of determining when a purchase is made.

The oversight in the regulations of the sales tax has reputedly forced many Japanese consumers t...

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Tax Delay Leads to Downgrade for Japan

April 28, 2015 Taxation in Japan

TOKYO – By delaying the upcoming hike to the rate of sales tax, Japan has garnered a downgrade to its credit rating.

On April 27th the international ratings agency Fitch Ratings downgraded the ratings of the sovereign debt of Japan, due to the country’s inaction to finding sources of revenues to compensate for the delay in the implementation of the country’s controversial hike to sales taxes.

Japan was scheduled to raise the rate of sales tax from 8 percent to 10 percent in April 2017, following an increase of 3 percent in April 2014.

According to Fitch Ratings the government of Japan has not done to account for the loss in revenues which will arise due to the delay in the implementation the raised tax rate.

It was also noted that last year the rate of corporate income tax in Japan w...

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Japan to Lower Corporate Taxes

December 31, 2014 Taxation in Japan

TOKYO – The government of Japan is encouraging businesses to raise employees’ salaries by reducing the taxes faced by business.

On December 30th the ruling coalition approved a cut to the rate of corporate taxes in the country, while giving indication that even further cuts may be enacted in coming years in order to boost economic activity.

Currently the top effective tax rate on corporate profits in Japan is 34.6 percent, however, under the details of the government’s proposal, the rate will fall to 32.1 percent in April, falling to a further 31.3 percent in April 2016.

The cuts are expected to result in the loss of tax revenue collections of approximately JPY 400 billion over the course of the next two fiscal years.

The reduction in the tax obligations faced by businesses is intende...

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