Nair & Co.

Japan Extends Special Tax Rates for Small/Medium Companies


Sunnyvale, CA -- (ReleaseWire) -- 08/26/2011 -- As the proposed Tax Reform Bill submitted to the Japanese Diet was not passed in its original form, the Amended Tax Reform Bill which includes Corporate Tax rates was approved and became effective on June 30, 2011.

The main changes under the amended Tax Reform Bill are:

The expiration dates of the Special Tax Measures Law which had been extended by 3 months (i.e. from March 31 2011 to 30 June 2011) by the Stopgap Bill are further extended. Thus, reduced corporate tax rate (18%) for a small/medium-sized company (share capital less than or equal to JPY 100 million) will be extended.

Tax credit for job creation - Companies filing blue tax returns and satisfying certain conditions can claim special tax credits of JPY 200,000 for the net increase in the number of each employee. The benefit will be applicable to the company for fiscal years commencing between April 1, 2011 and March 31, 2011.


International Tax
Foreign tax credit - the June Bill included the following amendments:

Where the applicable tax rates vary depending on an agreement with local taxing authorities, any taxes in excess of the amount computed using the lowest applicable rate will be excluded for purposes of the foreign tax credit computation or the anti-tax haven rules. The amendment is effective after June 30, 2011.


Corporate Tax

Reduction of corporate income tax rate
Review of the net operating loss carry-forward rule


About Nair & Co. 
Nair & Co. provides an integrated solution in the HR, finance, tax, compliance and legal arenas making a company’s overseas operations less risky, stress free and more strategic. It currently has 750+ client operations in over 50 countries with offices in U.K., India, China, U.S., Japan and Singapore. Nair & Co. was named among the top 100 outsourcing services providers in the world by the International Association of Outsourcing Professionals (IAOP). 

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