On April 7, 2020 a package of emergency fiscal measures to mitigate the economic impact of Covid-19 (“Emergency Measures”) was approved by the Japanese Cabinet. The package includes special tax measures for businesses, such as reductions to fixed asset and property taxes, the deferral of tax payments and social security premiums, and exemptions from National Pension Insurance and National Health Insurance premium payments.
The Emergency Measures aim to support the economy during the immediate critical phase focused on preventing the spread of COVID-19. The government is expected to introduce further measures focused on recovery of the economy and businesses, in a second phase once the virus has been contained.
The Emergency Measures are not yet enacted in law, but Japanese companies affected by COVID-19 should begin considering now whether they may be eligible to apply for any of the measures, or whether they would benefit from an immediate application under the existing laws to defer their tax return filing or tax payment deadlines.