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Noda Would Let Japanese Stock Tax Break Expire

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

07 December 2010


Japan’s Finance Minister, Yoshihiko Noda, has disclosed that, on its expiry, he would prefer to end the present reduced tax rate on capital gains and dividends from stock investments.

The reduced stock tax was first introduced in 2003, and subsequently extended on each expiry date, to encourage individuals to invest rather than save. The tax rate on capital gains and dividends was cut to 10% from 20%.

At a news conference, Noda was reported as saying that his plan would be to end the tax break when it expires, and return the stock tax rate to 20% for 2012. Such a measure, it is said, would help reduce Japan's huge public debt.

However, stock exchange investors have warned that such a move could have a detrimental impact on Japan's equity markets. Noda confirmed that he is aware of the various different opinions on the possible effects of reintroducing the 20% rate, and that the government would not take action without consulting all parties.

A comprehensive report in our Intelligence Report series giving a country-by-country analysis of offshore investment funds, stock exchanges and trusts, with an analysis of the US QI regime, is available in the Lowtax Library at http://www.lowtaxlibrary.com/asp/subs_reports.asp and a description of the report can be seen at http://www.lowtaxlibrary.com/asp/description_report9.asp
TAGS: individuals | capital gains tax (CGT) | tax | investment | equity investment | tax rates | tax breaks | individual income tax | Japan

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