2025 Tax reform outline – Taxation related to financial services and real estate

Japan tax newsletter 13 March 2025

On 20 December 2024, Japan’s ruling party (a coalition comprised of the Liberal Democratic Party and Komeito) released the 2025 Tax Reform Outline.

This newsletter provides an introduction to major reforms contained in the Outline specific to finance- and real estate-related tax rules, as well as financial institutions and insurance companies.

Please click here to access the overall 2025 Japan tax reform outline as released in the EY Japan tax newsletter published on 26 February 2025.

Please note that the contents of this newsletter may be revised in response to future Diet deliberations concerning the reform bill.

Contents

1. Financial services and securities taxation

(1) NISA measures
(2) Junior NISA measures
(3) Special measures for calculations related to transfers of listed shares and other securities held in designated accounts
(4) Notification system
(5) Identity verification procedures

2. Real estate taxation

(1) Measures pertaining to real estate transaction taxes in relation to the acquisition of real estate by investment corporations and special purpose companies (TMK)
(2) Measures pertaining to real estate transaction taxes in relation to the acquisition of real estate by special enterprises prescribed by the Act on Specified Joint Real Estate Ventures

3. Corporate taxation

(1) Revision of the rules concerning the catastrophic loss reserves of insurance companies, etc.
(2) Special measures for taxation on trust corporations for special purpose trusts
(3) Measures pertaining to beneficiary securities issuance trusts
(4) Relaxation of requirements for qualified mergers of cooperative organizations
(5) Revision of lease-related tax rules

4. International taxation

(1) Aligning with global minimum tax rules
(2) Revision of Japanese Controlled Foreign Company (“JCFC”) rules

5. Consumption taxation

(1) Repeal of the special measures pertaining to the timing of the transfer of lease assets

6. Other

(1) Tax rules and measures to secure funds for national defense build-up
(2) Revisions to the taxation of trusts subject to corporate taxation
(3) Stamp duties of loan agreements in relation to special loans provided due to the COVID-19 pandemic
(4) Unification of financial income taxation on derivative transactions (matters for consideration)
(5) Taxation on crypto asset transactions (matters for consideration)