Japan Tax Guide - for Beginners -

2016 Tax Reform Outline


タグ: Japan Tax Guide - for Beginners -

Question: Can you briefly explain the outline of 2016 tax reform?

Answer: 2016 tax reform outline was released by coalition party on December 16, 2015. It will be discussed in the Diet and concluded around the end of March 2016.

Here we introduce several significant topics:

  1.  Reduction in effective corporate tax rates

   The national corporate tax rate, currently 23.9%, is to be reduced to 23.4% from fiscal years beginning on or after April 1, 2016. The rate will be reduced to 23.2% for fiscal years beginning on or after April 1, 2018. As the result, the effective corporate tax rate including national tax and local tax will finally fall below 30%. Current rate is 32.11% and it will be reduced to 29.97% and 29.74% respectively.

    2.   Expansion of size-based portion of enterprise tax

  Size-based enterprise tax (local tax) consists of added value levy, capital levy and income levy. Added value levy and capital levy do not depend on income, and the portion of these levies will be increased from the current 3/8 to 5/8. This revision seems like a political measure to support the companies with profits.

   3.  TP documentation rules

  Requirements of documentation for transfer pricing rules will be revised in accordance with BEPS project by OECD. The new rule requires three types of documents.

1) Country-by-Country (CbC) report: The ultimate parent company of multinational enterprise (MNE) groups must file a report which declares revenues, profit (loss) before income tax, income tax paid, etc for each country, if it is a Japanese company or a foreign company having PE in Japan.

2) Master file: A Japanese company or a PE which is a constituent entity of a MNE group must file a report which shows organizational structure, business description, financial situation of MNE group, etc.

3) Local file: A company having international transactions with foreign related parties must prepare a report which states how the arm’s length price is calculated for the transactions.

  These documents have to be filed or prepared by designated date, although there are thresholds of volume of transaction or consolidated revenue.

   4.  Reduced consumption tax (C-tax) rate and invoicing system

  When the C-tax rate is increased to 10% in April 2017, the current 8% will be kept for sales of food and drink, and certain subscription of newspapers. It is also proposed that an invoicing system will be introduced to distinguish reduced rate above from April 2021, while there are transitional measures until then.

 For more detail of tax reform, please feel free to contact TOMA Consultants Group.

TOMA Consultants Group English Site      ⇒  https://toma.co.jp/en/



Question: 平成28年度税制改正の概要について教えて下さい。

Answer: 28年度税制改正の大綱が27年12月16日に与党から発表されました。今後、国会で審議され、28年3月頃に成立の見込みです。


     1.   実効税率の引き下げ


     2.  外形標準課税の拡大


 3.  移転価格文書化ルール


1) 国別報告書: 多国籍企業グループの最終親法人である内国法人又は同様の外国法人で日本に支店等を持つ場合は、国毎に収入金額、税引前損益、納税額等を記載したレポートを提出する必要があります。

2) マスターファイル: 内国法人又は日本に支店を持つ外国法人が多国籍企業グループを構成している場合、その組織構造、事業概要、財務状況等を記載したレポートを提出する必要があります。

3) ローカルファイル: 国外関連者との取引がある法人は、独立企業間価格の計算根拠を示すレポートを作成する必要があります。


 4.   消費税の軽減税率及びインボイス方式