Japan to Impose Tax on Units of Foreign Firms with Low Burden
Tokyo, Nov. 21 (Jiji Press)--The Japanese government and ruling coalition will consider legislation to impose a tax on subsidiaries of multinational companies based in low-tax countries, it was learned Tuesday.
Japan will strengthen measures against tax evasion by non-Japanese companies based in tax havens or countries with low tax rates, after some 140 countries and regions, including member states of the Organization for Economic Cooperation and Development, agreed in 2021 to set the minimum corporate tax rate at 15 pct.
According to people familiar with the matter, the planned legislation for fiscal 2024 tax reform is expected to cover multinational companies with sales of at least 750 million euros. Their Japanese subsidiaries would be taxed until their tax burden grows to match the least necessary level.
Through this fiscal year’s tax system reform, a Japan-based company with an overseas subsidiary paying a corporate tax of less than 15 pct became required to make up the difference.
[Copyright The Jiji Press, Ltd.]