Tokyo, Dec. 4 (Jiji Press)–Japanese government and ruling coalition officials are considering giving tax breaks to small and midsize companies investing 10 million yen or more in startups, sources familiar with their discussions told Jiji Press on Wednesday.
The officials see the move as a way to revitalize the Japanese economy and aim to include it in a tax reform package for fiscal 2020, which starts next April, the sources said.
The move comes as Japanese companies lag behind those in the United States, Europe and China in investments in startups, which have led to the creation of innovative services.
Large companies are required to make startup investments of 100 million yen or more to get tax breaks.
The envisaged tax breaks for small and midsize firms would apply to investments in unlisted companies founded less than 10 years earlier and not members of corporate groups led by large companies, the sources said.
Companies would be required to hold acquired shares for at least a year to prevent them from fraudulently obtaining tax breaks by reselling the shares in a short period of time, the sources said.
The tax breaks under consideration include deducting 5 pct of investment amounts from corporate income tax and allowing companies to book a certain amount of reserves as losses.