On July 16, the Planning Committee finalized the content of JBA's fiscal 2005 tax reform request as follows. The official request letter will be finalized at the Board of Directors Meeting in September based on this content.
| 1. | Solidifying confidence in the financial system |
| (1) | Expansion of carry-back refund system for losses and review of requirements for tax free write-offs of bad loans |
| - | To restore the carry-back refund system for losses and extend the period (currently 1 year). In the case of financial institutions, to extend the carry-back period greatly and further extend the carry-forward period (currently 7 years) |
| - | To allow drastic tax-free write-offs to financial institutions based on their self-assessments |
| (2) | Expansion of tax measures for early corporate revitalization |
| - | To treat asset appraisal losses and profits from debt waivers that are received by debtors in the event of corporate revitalization utilizing the Guideline for Multi-creditor Out-of-court Workouts in the same manner as when applying the Corporate Rehabilitation Law |
| - | To defer taxation on profits from debt waivers in the event of corporate revitalization utilizing legal liquidation or the Guideline for Multi-creditor Out-of-court Workouts by placing into a special account the amount that is deemed in the revitalization plan to become tax-exempt in the future |
| 2. | Invigorating financial/capital markets and promoting international financial transactions |
| (1) | Promoting the integration of taxation on financial income |
| - | To maintain balance in the taxation of various financial products and allow broad aggregate computation of losses and profits to promote integration of financial income taxation |
| - | To introduce a practical taxation system, which would be acceptable to both taxpayers and financial institutions. To provide a sufficient preparation period for implementation |
| (2) | To enable gains from publicly offered stock investment trusts to be computed in the aggregate with losses in other publicly offered stock investment trusts and stock sales |
| - | To treat asset appraisal losses and profits from debt waivers that are received by debtors in the event of corporate revitalization utilizing the Guideline for Multi-creditor Out-of-court Workouts in the same manner as when applying the Corporate Rehabilitation Law |
| - | To lighten the administrative burden for filing an exemption on withholding taxes for dividends of publicly offered stock investment trusts |
| (3) | Review of taxation for the defined-contribution pension plan |
| - | To abolish special corporate taxes on reserves for retirement pensions, or, at least postpone the deadline for suspension of said tax (end of March 2005) |
| - | To raise the contribution limit and permit matching contributions |
| (4) | Expansion of taxation concerning asset monetization |
| - | To eliminate property acquisition taxes for SPCs, or at least extend the applicable period (end of March 2005) of the existing reduced rate of said tax and the tax exemption for special land ownership tax |
| - | To deregulate accounting dividends SPCs can pay as expenses |
| (5) | Expansion of tax exemption measures for bonds held by non-residents |
| - | To expand the scope of non-residents eligible for the measures |
| - | To discharge custodian banks located in Japan from engaging in separate bookings by individuals when non-residents acquire JGBs via qualified foreign intermediaries |
| - | To eliminate taxes on bond interest other than JGBs that non-residents receive via the transfer system |
| (6) | Withholding tax in the Tokyo Off-shore Market |
| - | To make the exemption of withholding tax in the Tokyo Off-shore Market a permanent measure |
| (7) | Reduction in administrative work related to the enforcement of Japan-US Tax Treaty |
| - | To simplify filing procedures required in said Treaty |
| 3. | Invigorating the economy and rationalizing taxation |
| (1) | Expansion of tax measures to facilitate housing investment |
| - | To apply an amount limit and deduction rate for the outstanding balance of 2004 to 2005 and later years (with regard to special income tax deduction measures) |
| - | To make interest on housing loans deductible from income |
| (2) | Reduction and simplification of registration tax |
| - | To lessen and simplify the registration tax, by making it a low flat tax. To lessen the registration tax on mortgage transfers to help develop the loan market |
| (3) | Reduction and simplification of stamp tax |
| - | To lessen and simplify the stamp tax so that financial transactions are not hampered |
| (4) | Amendment to ZAIKEI taxation |
| - | To align the tax-exempt period after quitting a job with that allowed when changing jobs (2 years) |
| 4. | Securing a proper management environment |
| (1) | Review of consolidated taxation |
| - | To introduce appropriate measures for evaluating the assets of new entrants to consolidated taxation groups at the market value, so as not to hamper reorganization of financial institutions |
| - | To relax requirements for expending carry-forward losses when shifting to consolidated taxation |
| (2) | Review of taxation to facilitate reorganization of financial institutions |
| - | To eliminate the registration tax for mortgage transfers accompanying partitioning/merging of financial institutions, or at least, abolish the application period for the reduced tax rate and the time limit for registration of a transfer (within 3 years after acquiring rights) required of partitions to attain the same level as mergers |
| (3) | Review of foreign tax exemption system |
| - | To extend the carry-forward period (currently 3 years) for the maximum foreign tax exemption and tax amount of eligible foreign corporations |
| - | To expand the scope of companies eligible for the indirect foreign tax exemption to include tertiary subsidiaries, etc. |
| - | To abolish restrictions concerning the loss-deductible-period (currently 5 yeas) for after-tax reserves in tax haven taxation, or at least, extend the loss-deductible-period. To deduct "profits that do not constitute profits payable as dividends" when computing undisposed taxable income |