The Japanese Government has set goals to reach zero greenhouse emissions by 2050 and to promote the digital transformation of the Japanese economy. To achieve these goals, certain tax incentives have been introduced. These incentives have been introduced as part of the wider Industrial Competitiveness Enhancement Act.
On 26 March 2021, Japan’s 2021 tax reform bill (the Bill) was enacted following passage by the Japanese Diet. Under the provisions of this Bill, certain Carbon Neutral and Digital Transformation investments qualify for tax incentives amounting up to a maximum of JPY1.5b for Digital Transformation and up to JPY5b for Carbon Neutrality. The amount of the respective tax credit depends on the investment amount as well as satisfying specific conditions.
Source EY
