NIPPON


 

Japan's parliament Friday enacted a bill to provide targeted support to midsize companies, including tax benefits for those conducting mergers and acquisitions.

The revised law on strengthening industrial competitiveness defines midsize companies as businesses that are not legally considered small companies but have no more than 2,000 employees.

Japan is believed to have 9,000 such businesses. Capital investments and total salaries at midsize companies are growing faster than at large companies, and the latest legislation is aimed at propping up their growth through aid measures.

Specifically, the bill includes tax benefits enabling midsize companies executing multiple M&A transactions to set aside up to 100 pct of the acquisition costs as loss reserves.

The revision also includes a new scheme reducing corporate tax burdens to promote the production of critical goods such as semiconductors and electric vehicles, with reductions set based on production and sales volumes.