1. Introduction
The Japanese government announced that the FY2020 supplementary budget to fund the Emergency Economic Measures for Response to COVID-19 was approved on April 30. Each ministry has already announced support measures for companies and individuals on its website. On the website of the Ministry of Economy, Trade and Industry (METI), specific measures such as loans and subsidies provided by government or private financial institutes, tax and employment measures are revealed. METI also gives the information about subsidies for sustaining business of small-medium sized enterprises (SMEs). In this News, we will mention major points of tax and employment measures.
2. Tax issues
① National tax
・Extension of tax filing
Individual income tax returns, etc. for 2019 are flexibly accepted on or after April 17, 2020. Extension of corporation and consumption tax filings for companies is also granted based on the application by each taxpayer.
・Deferral of tax payment
Where revenue for taxpayers’ business is decreased by roughly 20% or more compared with that in a certain period of time (one month or more) of the previous year, the payment of almost any national taxes will be deferred without delinquent tax or collateral by applying to the tax authorities.
・Expansion of scope of tax carry back
Companies with stated capital of over JPY100 million (excluding large-sized companies) are also eligible for tax refund by applying tax carry back rules in each fiscal year ending between February 1, 2020 and January 31, 2022.
・Tax incentives for teleworking
Where SMEs make capital investment in teleworking, special tax credit or depreciation will be allowed.
・Flexibility of housing-loan deduction
For an individual who has difficulty in moving into a new house due to the effect of coronavirus, the individual can still take the same tax deduction by satisfying certain conditions.
・Special treatment for selection of taxable status under consumption tax
Where sales for one-month or longer in the period between February 1, 2020 and January 31, 2021 are decreased by roughly 50% or more compared with that in the previous year, the taxpayer can change (or select) the consumption taxpayer status.
・Stamp duty on special loan contracts made for companies whose business is affected by coronavirus will be exempted.
② Local tax
・Same as treatment for national tax mentioned above, local tax payment is also deferred by application.
・Property tax payment will be reduced or exempted and special treatment of property tax for achieving productivity revolution will be relaxed for SMEs.
3. Employment issues
・Where companies have difficulties in paying social and labor insurance premiums for a certain period of time, a grace period is provided by application.
・The qualification for applying employment adjustment subsidies is relaxed so that companies can maintain employment by paying leave allowance rather than firing employees.
・Subsidies for teleworking and pay leave coping with elementary school closures will be provided.
4. Conclusion
In this News, we mentioned “Emergency Economic Measures for Response to COVID-19.” Please note that this News only introduces general outlines and does not include professional advice. So please make sure not to make any decisions without taking professional advice individually. If you have any questions, please feel free to contact us.
(References)
Ministry of Economy, Trade and Industry
Website: https://www.meti.go.jp/english/covid-19/index.html (Accessed on April 27)
Ministry of Health, Labour and Welfare
(Accessed on April 30)
Query on the phone+81-3-6821-9455