"Corporate hometown tax payment" To expand the rate of tax credits November 23, 5:35
Percentage of "tax deductions" that the government and ruling party will deduct a certain amount from the tax amount in the tax reform next year to encourage the use of the "corporate version of the hometown tax payment system" that companies donate to local government initiatives that lead to regional revitalization Has been solidified to expand from 30% to 60%.
In the corporate hometown tax payment system that started three years ago, when a company contributes to local government initiatives that lead to regional revitalization, 30% of the donation is deducted from the corporate inhabitant tax and corporate business tax.
However, since there are many companies that do not use the system because the tax reduction effect is small, the government and the ruling party have extended the system for five years in order to encourage the flow of funds to local areas, and then increased the ratio of “tax deduction”. The policy of expanding from 30% to 60% was established.
Apart from this special measure, if the company donates to the local government, the total amount will be included in the deduction, so when combined, the tax burden equivalent to about 90% of the donation amount will be reduced.
In other words, donating 1 million yen will reduce the maximum tax of approximately 900,000 yen.
In the future, the government and ruling party will finalize the details of the system at the discussion of the tax examination committee, and will incorporate it into the tax reform outline outlined next month.