The NISA scheme, which makes profits from relatively small investments in trust funds and other financial products as exempt from tax, is also to be expanded
Taxes in Japan will fall for about three million households and rise for around one million in January this year following changes to a spousal tax deduction system.
The system currently cuts income taxes on households in which wives are homemakers or part-time workers as long as her annual income is ¥1.03 million (US$9,105) or less. The taxable income of husbands in such households is calculated after deducting a standard ¥380,000 (US $3,359).
But from January this year, the annual income cap for wives in these households will be raised to ¥1.5 million (US$13,260) so that husbands can continue to receive the full deduction of ¥380,000.
According to The Japan News, if a wife’s annual income exceeds ¥1.5 million, her husband’s taxable income deduction will be lowered proportionately. Husbands will be eligible for the taxable income deduction if their wives’ incomes are not more than ¥2.01 million ($17,768). But the spousal tax deduction system will not apply to households in which the husband’s annual income is over ¥12.2 million ($107,848).
NISA — a scheme that renders profits from relatively small investments in trust funds and other financial products as exempt from tax — is also set to be expanded. A 20% tax is usually imposed on profits from investments in financial products, but those made using NISA are exempt. The tax exemption is applied to profits from sales and dividends of investment trust funds that are judged to meet criteria set by the Financial Services Agency.
Under the conventional NISA scheme, such profits are tax-exempt for five years on condition no more than ¥1.2 million (US$10,608) is invested per year. Holding a conventional NISA and Tsumitate NISA concurrently is prohibited. But under the new Tsumitate NISA scheme, relevant investments will be tax-exempt for the first 20 years on condition that no more than ¥400,000 (US$3,536) is invested per year.
A law on using dormant deposits will also come into force. Money in accounts at banks and other financial institutions into which no deposits or withdrawals have been made for 10 years or more will be used to promote public interest activities. But financial institutions would still accept depositors’ requests for withdrawals from such accounts.
The NISA scheme, which makes profits from relatively small investments in trust funds and other financial products as exempt from tax, is also to be expanded
Taxes in Japan will fall for about three million households and rise for around one million in January this year following changes to a spousal tax deduction system.
The system currently cuts income taxes on households in which wives are homemakers or part-time workers as long as her annual income is ¥1.03 million (US$9,105) or less. The taxable income of husbands in such households is calculated after deducting a standard ¥380,000 (US $3,359).
But from January this year, the annual income cap for wives in these households will be raised to ¥1.5 million (US$13,260) so that husbands can continue to receive the full deduction of ¥380,000.
According to The Japan News, if a wife’s annual income exceeds ¥1.5 million, her husband’s taxable income deduction will be lowered proportionately. Husbands will be eligible for the taxable income deduction if their wives’ incomes are not more than ¥2.01 million ($17,768). But the spousal tax deduction system will not apply to households in which the husband’s annual income is over ¥12.2 million ($107,848).
NISA — a scheme that renders profits from relatively small investments in trust funds and other financial products as exempt from tax — is also set to be expanded. A 20% tax is usually imposed on profits from investments in financial products, but those made using NISA are exempt. The tax exemption is applied to profits from sales and dividends of investment trust funds that are judged to meet criteria set by the Financial Services Agency.
Under the conventional NISA scheme, such profits are tax-exempt for five years on condition no more than ¥1.2 million (US$10,608) is invested per year. Holding a conventional NISA and Tsumitate NISA concurrently is prohibited. But under the new Tsumitate NISA scheme, relevant investments will be tax-exempt for the first 20 years on condition that no more than ¥400,000 (US$3,536) is invested per year.
A law on using dormant deposits will also come into force. Money in accounts at banks and other financial institutions into which no deposits or withdrawals have been made for 10 years or more will be used to promote public interest activities. But financial institutions would still accept depositors’ requests for withdrawals from such accounts.
