The first edition of the Newsletter is to provide update of tax and other fiscal measures taken by the Japanese Government to mitigate the impact of Covid-19.
OUTLINE OF SOME SUPPORT MEASURES
Individual Income Tax Return Due Date
Individual Income Tax return for FY2019 was due to be filed on March 16, 2020. It is announced that tax return filing due date and tax payment due date of Individual Income Tax return for FY2019 is postponed to April 16, 2020.
The due date for filing Consumption Tax return for individual proprietor, Gift Tax return and other documents/application, including Report of Overseas Properties, is also postponed to April 16, 2020.
Extension Of Tax Filings Due Date For Corporations
Corporate Tax return is due to be filed within two months after the fiscal year-end of the corporation, which can be extended to three months after the fiscal year-end. Consumption Tax return is also due to be filed within two months after the fiscal year-end of the corporation.
It is announced that tax filing due date and tax payment due date can be requested for extension when taxpayer cannot file and pay Corporate Tax, Consumption Tax and other taxes on or before the due date because of the situations caused by COVID-19 where tax payer cannot prepare financial data or tax return for such reasons as:
- taxpayer or their tax advisor cannot maintain ordinary course of business due to infection to the disease, close of office or leave of employees, etc,
- director or accounting manager of taxpayer is out of country and cannot return to Japan, and
- taxpayer postpose general shareholders meeting beyond 3 months after the year-end.
Taxpayers have to file the application for extension within one month from the date when the situation gets resolved. Filing of the application may be substituted by writing down the fact that the taxpayer is applying for the extension due to COVID-19 in the blank space of tax return.
Tax Deductibility Of Products Offered To Support Victims
When a company offers their products to support the people who have suffered from casualty, the cost of the products (with related cost) is allowed as deduction for Corporate Tax purpose. It is announced the rule is applicable under the situation of COVID-19 as far as the offer is made to respond to urgent needs before the end of the epidemic of COVID-19.
Interest-free Loan/Credit Guarantee For Small Business
There are several interest-free loan or credit guaranty for small business provided by governmental agency for the purpose of supporting small business in Japan. It is announced that budget for the support is increased up to JPY280 million to mitigate the impact of COVID-19.
Small businesses, such as hotel, restaurant and workout gym, experiencing rapid decrease of sales due to COVID-19 are recognized as eligible to the loan/ guarantee and may apply for the support.
Subsidy For Promoting Productivity Revolution Of Small Business
There are several types of subsidy by government to promote productivity revolution of small business.
Those subsidies are also available for the needs caused by COVID-19, including capital investment for building new production line required due to the collapse of supply chain or introducing tools for promoting efficiency for telework. The subsidy is up to JPY10 million although it depends on the type of subsidy. The application for the subsidy is due from May to June 2020 depending on the type of subsidy and will be applied to the Small and Medium Enterprise Agency.
For corporations with a December fiscal year-end, Corporate Tax return filings for FY2019 should have been completed by the end-of March 2020.
If you have not yet completed tax return filing due to COVID-19 for the fiscal year ended December 2019, you should request extension of the filing and payment. For the companies with year-end coming soon, it is also recommended to consider applying for the extension.
Please contact Mazars if you need assistance in analyzing recent tax changes and in filing your extensions or tax returns.
Disclaimer: This document has been produced by Mazars in Japan for its Clients. It may not be reproduced (in whole or in part) or transmitted to any other person without the prior consent of Mazars in Japan. Whilst we endeavor to share information up to date and correct, Mazars is not responsible for any errors or omissions, or for the results obtained from the use of this information.
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