IMPLEMENTATION LEVEL

National

AFFECTED FLOW

Inflow

ANNOUNCED AS TEMPORARY

No

NON-TRADE-RELATED RATIONALE

No

ELIGIBLE FIRMS

all

JUMBO

No

TARIFF PEAK

No
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Inception date: 01 Apr 2015 | Removal date: open ended

Tax or social insurance relief

As part of the 2015 Tax Reform the Ministry of Economy, Trade, and Industry (METI) revised of the 2013 Research and Development Tax Credit System. The revision was instituted in order to promote more Open Innovation Initiatives. Open Innovation Initiatives are projects in which companies have joint or contracted research between separate companies or institutions. The revision increased the tax credit rate significantly from the 2013 edition. Companies which are not participating in the initiative will only receive an 8-10% tax credit or 12% if they're an SME. Additionally, it added a provision which expanded to include IP royalties paid by SMEs to the deductible expenses. 

Open Innovation: R&D expenses × 20 or 30%                                                                             

  • Joint or contract research with universities and special research institutes, etc.:  12%      ->    30% tax credit
  • Between companies, etc.:                                                                               12%      ->    20% tax credit
  • Between Public interest corporations, local government agencies, etc.,                8-10%  ->     20% tax credit
  • Additonal deduction of IP Royalties for SMEs                                                     8-10%  ->     20% tax credit

AFFECTED COUNTRIES

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