Article

Wage increase tax incentives revised (2018 Tax Reform)

Japan Inbound Tax & Legal Newsletter October 2018, No. 32

Revisions to Japan’s income tax law, which include amendments to the tax incentives for wage increases implemented in the 2013 tax reform, were approved by the National Diet on 28 March 2018 and enacted on 31 March 2018.The 2018 tax reform renames the incentives program “tax incentives for wage and investment increases,” and aims to further promote increases in wages, employee training and capital investment.

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This newsletter explains the following topics;

1. Summary of program changes

(1) Large corporations (non-SMEs)
(2) SMEs

2. Revised eligibility requirements

(1) Fiscal year for comparing wage payments
(2) New capital investment test for large corporations
(3) New training expense test for additional tax credit
(4) Definition of “continuous employee”
 
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* This Article is based on the relevant Japanese or specific country’s tax law and other authorities in effect on the date of this Article. This Article would not be guaranteed updating if there are any changes in Japanese tax law, any other law, or interpretations by the courts or tax authorities thereof after the date of this Article.

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