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FSA to call for lower tax burden on foreign board members

  • October 1, 2020
  • , Jiji Press , 12:31 p.m.
  • English Press

Tokyo, Oct. 1 (Jiji Press)–Japan’s Financial Services Agency will seek to lower tax burdens on board members of foreign asset management companies in a bid to attract such businesses to the country.

 

The plan will be included in the agency’s tax reform request for fiscal 2021, which also calls for support measures for small companies struggling amid the novel coronavirus.

 

The Japanese government has been seeking to attract foreign talent to Tokyo to make the Japanese capital an international financial hub. However, efforts have been hampered by Japan’s higher tax burdens compared with other countries, such as foreign assets of people living in Japan for over 10 years being subject to inheritance tax in the country.

 

The FSA hopes that the proposed tax system reform will help attract people with high levels of expertise from other countries.

 

Specifically, the plan calls for the easing of conditions for overseas assets owned by board members of foreign asset management companies to be exempt from inheritance tax. It also includes measures for the partial lowering of the maximum income tax rate.

 

For foreign asset management companies, the agency will call for special measures in which unlisted firms, like publicly traded companies, can book board members’ compensation as losses, so that the corporate tax burden can be lowered.

 

The FSA is seeking to boost lending by private financial institutions to small and midsize companies by recognizing a certain proportion of the increase in such lending from the previous fiscal year as losses, reducing their tax burden.

 

It will also call for a moratorium on taxation on profits from the transfers of shares when third parties such as financial institutions succeed the business operations of small companies. The move comes as many choose to end their operations and go out of business.

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