2020 Tax reform outline - Taxation related to finance and real estate

Japan tax newsletter 12 March 2020

The 2020 tax reform outline (hereinafter, "Outline") was released on 12 December 2019 from the LDP/Komeito ruling coalition.

This alert provides an introduction to major reforms specific to finance- and real estate related tax rules, financial institutions and insurance companies contained in the Outline.

For a general overview of the Outline, please refer to Japan tax newsletter "2020 Japan tax reform outline" dated 13 February 2020.

Please note that the contents of this newsletter may be revised in response to future Diet deliberations concerning the reform bill.

Contents

1. Revisions of the NISA program and the Junior NISA program
2. Tax measures pertaining to crypto-asset derivative transactions
3. Introduction of special provisions for offsetting gains and losses pertaining to real estate income derived from foreign pre-owned buildings
4. Simplification of corporate number notifications
5. Revisions accompanying the review of Japanese accounting standards regarding fair value measurement
6. Treatment of deemed realized gains or losses on derivative transactions between companies in the same tax consolidation group
7. Rectification of the input consumption tax credit regulations pertaining to the acquisition of residential rental buildings
8. Revision of the special rules concerning taxation pertaining to investment corporations
9. Revision of the scope of interest expenses not subject to the earnings stripping rules
10. Other reforms