The 2013 tax reform proposal submitted by the Cabinet Office Tax Commission known as Taiko, (the 2013 Tax Reform Proposal), was released on January 29, 2013 upon approval by the Cabinet. The proposed tax law changes will be submitted to the Diet this month for consideration.
This Global Watch focuses on the proposed income tax reforms and their impact on individual taxpayers in Japan. The 2013 Tax Reform Proposal includes, among many provisions, an additional national tax bracket of 45% for taxpayers with more than 40 million yen of taxable income (effective January 1, 2015). Another significant proposal is the introduction of non-taxable Individual Savings Accounts (coinciding with the reversion of the separate 10% tax rate on dividends and capital gains on listed stock to 20% at the beginning of 2014) and an increase in the home loan credit for homeowners.