18. Major Tax Reliefs for SMEs in Japan 中小法人と中小企業者の優遇税制

中小法人と中小企業者の相違について英語でまとめてみました。（財務省ホームページ）

Small and medium-sized enterprises ("SMEs") in Japan can be classified broadly into the following two types:

• SMEs under Corporate Tax Law ("CTL"); and
• SMEs under Special Measures Tax Law ("SMTL")

Tax benefits to these two types of SMEs vary as follows (source: Ministry of Finance). For more about Japanese tax and accounting, click HERE:

I. Tax benefits available to SMEs under CTL　中小法人の優遇税制
II. Tax benefits available to SMEs under STML　中小企業者の優遇税制

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I. Tax benefits available to SMEs under CTL

1. Reduced corporate tax rate for the first JPY8 million
2. Deductible provision for bad/doubtful debts up to a certain amount
3. Utilization of net operating loss ("NOL") carryforwards up to the income amount
4. Carryback of NOLs for one year 
5. Exemption from tax on retained earnings, which is applicable to certain family corporations  
6. Deduction of entertainment expenses up to a certain amount

II. Tax benefits available to SMEs under STML

1. Additional tax credits for R&D costs
2. Additional tax credit for wage increases
3. Tax relief for newly acquired assets
4. Tax relief for assets acquired to improve productivity, profitability or digitization, etc.
5. Tax relief for capital investment for business improvement
6. Accelerated depreciation of assets for business continuity
7. Immediate write-off of costs of depreciable assets of JPY300,000 or less

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