The special measure of the corporate business succession tax system expires at the end of 2027 (Reiwa 9)A system that lets you put off the tax when you hand a company down to your child
The corporate business succession tax system defers inheritance tax and gift tax on unlisted shares, etc. Under the special measure, the deferral ratio is 100%, it covers all shares without voting restrictions, and up to 3 successors are allowed. The deadline to submit the special succession plan is September 30, 2027, and the application deadline is December 31, 2027.
Key points
- Tax deferral ratio under the special measure is 100% (80% under the general measure)
- Covered shares are all shares without voting restrictions (up to two-thirds of total shares under the general measure)
- Up to 3 successors from among multiple shareholders (1 under the general measure)
- The special succession plan must be submitted by September 30, 2027 (submissions started on April 1, 2018)
- Applies to inheritances and gifts from January 1, 2018 through December 31, 2027
What to do in practice
- Estimate the timing of the succession and work backward to see whether it can be completed by December 31, 2027
- Check with a certified support organization or the competent authority whether a special succession plan must be submitted
When a company's owner dies or hands the company to a child, tax is charged on the company's shares too. So that this does not make it impossible to keep the company going, there is a system that lets you put off paying the tax if you meet certain conditions. It has a deadline, so preparing early is important.
Points
- With the special measure, the share of tax you can put off paying is 100%
- You can choose up to 3 people to take over (successors)
- The plan must be submitted by September 30, 2027, and handovers up to December 31, 2027 can use it
What the words mean
- Tax deferral
- Being allowed to put off paying a tax, under conditions
- Successor
- The person who takes over the company
- National Tax Agency (NTA): NTA: No. 4148 Special provisions for deferral and exemption of inheritance tax on unlisted shares, etc. (corporate business succession tax system)
This article summarizes and explains materials published by government agencies and is not advice on any individual case. Rules can change, so for actual procedures and decisions always check the latest original materials and consult professionals such as tax accountants or labor and social security attorneys. English, Simplified Chinese and Traditional Chinese versions are translations prepared from the Japanese articles for convenience. If anything differs, the Japanese text and the original source take precedence.