Who says there's nothing new under the Rising Sun? Effective from New Year's Day, a number of changes will be forthcoming in Japan's tax code. And what's more, if you're in business for yourself and you'd like to render unto Caesar with plastic, reports Nikkan Gendai (Dec 17), you can make arrangements to do so. Read on.
The new system will be taking effect in just three weeks' time: from 8:30 a.m. on Wednesday, Jan 4, when the banks re-open for business after the New Year's break.
"Credit cards can't be used for taxes withheld from salaried wages," financial planner Yoshihiro Nagao tells the tabloid. "But they can be used for gift taxes, inheritance taxes or certain taxes related to automobile ownership. Company proprietors can use it to pay the 8% consumption tax, taxes on alcohol and tobacco, petroleum products and so on. And card holders are entitled to use any premiums, points or mileage accrued on their cards to obtain goods or services."
Now that's a real incentive.
Other changes will be taking effect from 2017. As certain medications such as pain-reducing adhesive plasters like Salonpas DX will no longer be dispensed by doctor's prescription, your annual outlays for OTC (over the counter) medications in excess of 12,000 yen per year can be added to other hospital receipts to apply for a tax deduction, with the maximum ceiling for OTC outlays set at 88,000 yen.
"So hang on to your drugstore receipts, even the ones for small amounts," Nagao advises.
Another change is that salaried workers over age 65 will now be obliged to make contributions to the unemployment tax scheme ("koyo hoken"). Of course, by the same token, workers over age 65 will be eligible to receive payouts, which can also be applied to those who need to take time off from work to provide care for an enfeebled family member. Unfortunately, paid child leave time will be cut from one year to six months.
Another change, to take effect from next October, is one likely to be heartily welcomed by workers of the foreign persuasion: the minimum number of years a worker must pay into the various Japan pension funds in order to be eligible to receive payouts, formerly set at 25 years, will be reduced to 10 years. That is, people who pay into the system for more than 10 years, but fewer than 25, who previously had not been eligible to collect, can now expect to receive pension payouts upon reaching the prescribed age.
The new laws are also expected to impact on the life insurance industry.
"With the current negative rates of interest, the life insurance companies' operating profits have sharply declined," notes Nagao. "This means that certain types of insurance that consumers use for savings, such as whole life, annuities, savings for children's' education and so on, are likely to become dead weights for the insurance companies, which have already begun increasing their premiums -- with more increases to be expected in the coming year. Some people have looked to policies or savings plans that involve foreign exchange, but the risks for these have also increased, so you'll need to be careful. It's smart to look for policies that will pay out a refund upon maturity."© Japan Today