ANNOUNCEMENT 01 Apr 2015

The 2015 Tax Reform drastically alter the Research and Development Tax Credit System of Japan by drastically increasing the credit rates.

NUMBER OF INTERVENTIONS

1

  • 1 harmful
  • 0 neutral
  • 0 liberalising

SOURCE

METI (2015) 研究開発税制の強化・重点化 「Strengthen and prioritize R & D tax system」(JPN)
Available at:
https://www.meti.go.jp/policy/tech_promotion/tax/27FYRDzeisei.pdf

METI (2015) Outline of the FY2015 Revisions to the R&D Tax Credit System
Available at: (ENG)
https://www.meti.go.jp/english/policy/economy/Technical_Promotion/pdf/02.pdf

Inception date: 01 Apr 2015 | Removal date: open ended
Still in force

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 SECTORS

 
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AFFECTED PRODUCTS

 
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