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Japan Urged To Address Spousal Tax Break In Budget

by Mary Swire, Tax-News.com, Hong Kong

16 November 2016


In an interim report on tax reforms for next year, the Japanese Government's Tax Commission has suggested that the existing spousal tax deduction should be amended, with the intention of increasing the number of women in employment.

In a dual income family, the maximum income that the lower-earning spouse can presently receive in order for a household to take full advantage of the spousal exemption in the Japanese income tax code is JPY1,030,000 (USD9,450). At that income or below, the spouse with the higher earnings can claim a further JPY380,000 tax deduction.

The limit is said to be too low as it discourages many women from properly entering the workforce. The Tax Commission has recommended that the income cap should be increased in the budgetary proposals for the 2017 fiscal year (from April 1), which are being finalized.

The panel did not, however, recommend how far the limit should be raised, although some lawmakers have suggested it should be JPY1.5m.

TAGS: tax | law | budget | tax reform | Japan | Tax

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