Draft of Tax reform for year 2012 (2 - Special corporate tax rate for reviving)

Friday, April 20, 2012 8:19 In order to raise fund to revive the Northeastern area of Japan suffered from great disaster in last March, a 10% of tax rate addition is available for a period of three years. The new tax rate is calculated by multiplying the new tax rate by the special corporate tax rate for reviving (see the table below). In order words, the Companies whose fiscal year beginning on or after April 1, 2012 are going to be applied the special corporate tax rate for reviving in addition to the reduced tax rate (please see the previous post for information of the reduce tax rate proposed in the tax reform of year 2012.) Taxable incomeBefore tax reform(FY2011)Reduced tax rate of year 2012 x special corporate tax rate for reviving (new Tax rate x special corporate tax rate for reviving) Not a SME30% 28.05%= 25.5% x 110% SMETaxable income equal to or under 8 million yen18%>Reform >16.50%= 15% x 110% Taxable income exceeding 8 million yen30%28.05%= 25.5% x 110% SME: Small to medium size company Applicable period: three years (from 01/04/2012 to 31/03/2014) (For the companies whose fiscal year beginning during the period of from 01/04/2012 to 31/03/2014)