Friday, 17 August 2012 02:47
The tax deductible amount for donation was reduced by a half compared to the amount calculated based upon the pre-tax reform. In other words, the amount donated which would have been eligible to be deducted from the taxable income upon the pre-tax reform will be reduced by a half according to the new tax rules of the tax reform (see ※1 and ※2):
Example: Calculation of the non-deductible donation based upon the new rules of tax reform
Calculate the non-deductible donation of a company with capital stock of 100,000,000JPY, taxable income before deducting donation 30,000,000JPY:
1. General donation: 2,000,000JPY
2. Tax deductible donation: (100,000,000JPY x 2.5/1,000 + 30,000,000 x 2.5/100) x 1/4 = 250,000JPY
3. Non-deductible donation: 2,000,000JPY – 250,000 = 1,750,000JPY
Applicable period: applied to companies whose fiscal year starting on or after April 1, 2012.
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