Financial Services Tax News Stamp tax relief on real estate April 2013

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Financial Services Tax News
Stamp tax relief on real estate
contracts (2013 Tax Reform)
April 2013
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This newsletter explains the
special relief from stamp tax
introduced on a purchase and sale
agreement of real estate property
in the 2013 tax reform.
・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・
The 2013 tax reform bill was passed into law by the
Japanese Parliament (Diet) on March 29, 2013.
This newsletter focuses on reform of a special stamp
tax relief on purchase and sale agreements of real
estate property and construction agreements; which is
now extended and expanded under the 2013 tax
reform.
Financial Services Tax News
Extension and expansion of special stamp tax relief on real estate contracts
Reduced rates of stamp tax are available to documents with respect to a purchase and sale agreement of real
estate property and construction agreement executed during period from April 1, 1997 to March 31, 2013. The
2013 tax reform extended this relief for one more year (i.e., until March 31, 2014) in order to support real estate
transactions and investment in construction project. In addition, in light of the forthcoming increase in
consumption tax, new reduced rates are to be introduced that will become applicable to these documents
executed between April 1, 2014 and March 31, 2018. The reduced rates are tabled as follows:
Unit: JPY
Contracted Amount
Purchase and Sale
Construction Agreement
Agreement of real estate
property
up to 100,000
up to 1 million
over
up to
over 1
up to 2
100,000
500,000
million
million
over
up to 1
over 2
up to 3
500,000
million
million
million
over 1
up to 5
over 3
up to 5
million
million
million
million
over 5 million
up to 10 million
over 10 million
up to 50 million
over 50 million
up to 100 million
over 100 million
up to 500 million
over 500 million
up to 1 billion
over 1 billion
up to 5 billion
over 5 billion
Base Rate
(Note 1)
Reduced Rate
up to March 31,
2014
Reduced Rate
up to March 31,
2018
(Note 2)
200
-
-
400
-
200
1,000
-
500
2,000
10,000
20,000
60,000
100,000
200,000
400,000
600,000
-
1,000
5,000
10,000
30,000
60,000
160,000
320,000
480,000
15,000
45,000
80,000
180,000
360,000
540,000
(Note 1) Applicable unless the reduced rates apply
(Note 2) Applicable to documents executed during the period from April 1, 2014 to March 31, 2018
The reduced tax rates apply to a purchase and sale agreement of real estate property even where the agreement
contains side-by-side letters with terms as listed in Item 1 in the Appended Table 1 of the Stamp Tax Act.
A construction agreement means a contractual document prepared in respect of construction works of buildings
as defined in Article 2, Paragraph 1 of the Construction Business Act. Even where the construction agreement
contains other service contracts in addition to the construction works of building, the relief is still applicable.
However, the relief would not be available if the agreement only contains service contracts such as designing,
maintenance and repair of buildings, but not the construction of buildings.
Other items on stamp tax reforms
Currently, receipts (ryoshu-sho) for money or securities of less than JPY 30,000 are exempt from stamp tax. In
light of market practice with increasing e-commerce transactions not subject to stamp tax, the 2013 tax reform
expands the threshold for this exemption from JPY 30,000 to JPY 50,000, which will be applicable to receipts
on or after April 1, 2014.
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Financial Services Tax News
For more detailed information, please do not hesitate to contact your financial tax
services representative or any of the following members:
Zeirishi-Hojin PricewaterhouseCoopers
Kasumigaseki Bldg. 15F, 2-5, Kasumigaseki 3-chome, Chiyoda-ku, Tokyo 100-6015
Telephone: 81-3-5251-2400, http://www.pwc.com/jp/tax
Financial Services
Partner
Sachihiko Fujimoto
81-3-5251-2423
[email protected]
Katsuyo Oishi
81-3-5251-2565
[email protected]
Yuka Matsuda
81-3-5251-2556
[email protected]
Akemi Kito
81-3-5251-2461
[email protected]
Hiroshi Takagi
81-3-5251-2788
[email protected]
Raymond Kahn
81-3-5251-2909
[email protected]
Stuart Porter
81-3-5251-2944
[email protected]
Kenji Nakamura
81-3-5251-2589
[email protected]
Nobuyuki Saiki
81-3-5251-2570
[email protected]
Akiko Hakoda
81-3-5251-2486
[email protected]
Kyoko Imamura
81-3-5251-2855
[email protected]
Senior Manager
Satoshi Matsunaga
81-3-5251-2586
[email protected]
Manager
Takashi Nonaka
81-80-3592-6104
[email protected]
Hiroko Suzuki
81-80-3592-6100
[email protected]
Kotaro Fujino
81-80-4104-5364
[email protected]
Nobuyoshi Hiruma
81-80-3592-6099
[email protected]
Kohei Kobayashi
81-80-4104-5446
[email protected]
Teruyuki Takahashi
81-3-5251-2873
[email protected]
Ryann Thomas
81-3-5251-2356
[email protected]
Naoki Hayakawa
81-3-5251-6714
[email protected]
Director
Transfer Pricing Consulting Group
Partner
Director
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