NEWS
JAPAN TO END WINE AND DINE TAX BREAKS TO BIG COMPANIES
By Susan Lewis
20-11-2019
The Japanese government is planning to end a special tax break on wining and dining expenses enjoyed by large companies when fiscal 2020 begins on 1st April, according to a report from Jiji Press new agency.
The special tax relief allows companies to deduct half of their wining and dining expenses from taxable income.
The report quoted a ruling party source as saying that the tax break is now viewed as unnecessary for big companies because many of them are spending less on wine and dine with business partners.
However, the report said the Abe government will extend the tax break to small companies for another two years because they are still spending relatively large amounts on entertaining clients.
Companies that are capitalized at below ¥100 million (USD0.92m), which account for over 90 percent of domestic Japanese companies, can still deduct half of their wine and dine expenses from taxable income in the new fiscal year.
Introduced in April 2014 to alleviate the impact of consumption tax hike, the tax break was not supposed to be permanent and has since been reviewed every two years.
As part of its structural economic reforms, the Abe government raised consumption tax to 8 percent from 5 percent in 2014, the levy was again raised to 10 percent last month.
The outline for Abe government’s fiscal 2020 is scheduled to be adopted by parliament next month.
(the writer can be contacted at: info@thewinechronicle.com)
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