Japan Press Weekly

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2017 February 22 - 28 [ECONOMY]

Toyota receives 322.5 billion yen in R&D tax breaks over 3 years

Toyota Motors, under calculations based on government data, received 94 billion yen in R&D tax breaks in FY 2015.

The auto giant received tax cuts of 120.1 billion yen for its research and development in the FY 2013 and 108.4 billion yen in the FY 2014. The money the automaker has saved from the R&D preferential taxation program since the inauguration of the Abe government in 2012 amounts to 322.5 billion yen.

The report the Ministry of Finance submitted to the Diet shows that the amount of tax cuts the government provided for corporate R&D in the previous fiscal year was 615.8 billion yen in total. Large corporations with a capital of more than one billion yen received 89.3% (549.7 billion yen) of the total. In addition to the R&D tax breaks, the Abe regime gives large corporations an enormous amount of tax reductions for investments, resulting in a loss of 119.7 billion yen in state tax revenues.

The preferential taxation system in place for corporate R&D targets large corporations such as automakers and drug companies which require substantial expenditures for product research and development.

The Abe government in fiscal 2015 decreased the corporate tax rate from 25.5% to 23.9% but did not decrease the rate of R&D tax breaks.

In other words, large corporations have been enjoying a “double gain” from tax breaks for R&D spending as well as from the corporate tax cuts.

Past related articles:
> Large corporations accumulate internal reserves by taking advantage of tax cuts [July 8, 2016]
> JCP Kokuta: Abe should impose fair share of tax burden on wealthy companies [January 7, 2016]