Japan Press Weekly

Tweet

2015 April 15 - 21 [ECONOMY]

Corporate tax rate for large corporations was only 13.3% in FY2013

Large corporations in Japan in fiscal 2013 paid only 13.3% on average in the corporate tax rate, down 0.3 percentage points from a year earlier, despite the officially designated 25.5% rate of taxation.

Japanese Communist Party lawmaker Koike Akira pointed out this low tax rate on large corporations based on data released by the National Tax Agency at a recent meeting of the House of Councilors Budget Committee.

The recorded income of corporations with a capital of more than one billion yen was 29.9 trillion yen thanks to various kinds of preferential treatment. However, their actual income totaled 41.6 trillion yen.

Recalculating the rate of corporate tax using the 41.6 trillion yen figure, Koike stated that large corporations actually paid only 13.3% in the corporate tax.

Government tax breaks such as for R&D and foreign tax credits relieve them from paying the 25.5% rate. As a result, the annual loss in corporate tax revenues exceeds four trillion yen.

Last month, the House of Councilors enacted a bill to reduce the corporate tax from the present 25.5% to 23.9% by the majority vote of the Liberal Democratic and Komei parties. The Abe government will offer even more tax cuts for large corporations that already enjoy generous tax breaks.

In Diet discussions, JCP legislators have often demanded that the government make public the names of top companies benefitting from preferential tax treatment, but the LDP and the Komei always oppose this call.

Past related article:
> Gov’t hides names of corporations receiving tax breaks at request of business circles [April 3, 2015]