Draft of Tax reform for year 2012 (7 - The tax deductible amount for donation reduced)

By way of paying excessive interest to its affiliated party, a company can reduce its income and thus avoid paying much tax which it has to otherwise. In order to prevent such tax avoidance, the amount of interest exceeding 50% of taxable income will be not deductible. The rule is named as "excessive interest expense taxation": Applicable period: applied to companies whose fiscal year starting on or after April 1, 2012.