UPDATE – we are now supporting with loan applications. Please contact us for help.
We realized that a lot of our clients who have Japanese registered entities may not realize the extent the Japanese government and private institutions are making funds available to help navigate the current COVID-19 Coronavirus climate. With that in mind we wanted to organize some high level information of Japan Financial Relief for Coronavirus in English below with links to the application instruction websites.
Ward Office Loans
- Loans available:
- 5 million yen up to 3 years interest free
- 20 million yen
- Basic requirements:
- 10% or more in sales decline compared to the same month the previous year
- Capital of less than 10 million yen or less than 100 employees (less than 30 employees for retail, wholesale and service industry)
- Company’s address should registered in the ward
- Industries not applicable: agriculture, forestry, fisheries, recreational entertainment business, financial business, religious corporation, non-profit organization (excluding NPO), LLP (Limited Liability Partnership)
- How to apply:
- Applicants must be up to date on their inhabitant and corporate business tax payments OR applicants must have an officially sealed document from the tax office for the extension of tax payment
- Application due date could fall between June 30, 2020 and September 30, 2020. Please check with your local ward
Credit Guarantee Association
- Relief funds available:
- Safety net (280 million yen)
- Crisis-related (280 million yen)
- Basic requirements:
- Sales amounts of the previous three months or forecasted sales amounts for the coming three months shows a decrease of 5% or more compared to the same periods last year
Japan Finance Corporation
- Relief funds available:
- First time loan applications may be limited to 30 million yen, with a potential to increase to 60 million yen
- Special Interest-free and Unsecured Loans (300 million yen)
- Relaxation of Requirements for Safety Net Financing (720 million yen)
- Basic requirements:
- Sales decreased 5% or more in a particular month compared with the same month last year or with the same month two years ago
- The business is expected to recover and develop in the medium to long term
Minister of Commerce and Industry – Chuo Branch
- Relief funds available:
- Crisis Response Loan (300 million yen)
- Basic requirements:
- Sales decreased 5% or more compared with the same month last year or with the same month two years ago
Ministry of Commerce and Industry
- Relief Funds available:
- SME Financial Consultation Counter to Open as a Measure Supporting SMEs and Small Enterprises Affected by Novel Coronavirus (100 million yen)
- Basic requirements:
- There are various loan programs available depending on if sales decreased by 5%, 10%, 15%, 20% or more compared with the same month last year or with the same month two years ago
Employment Subsidies
- Details regarding employment subsidies
- Basic requirement:
- Sales decreased 5% or more compared with the same month last year
- All labor law documentation is compliant
Labor Insurance Premium Payment Due Date Extension
- Qualifications:
- After February 2020, sales decreases 20% or more, compared with the same month last year
- It is temporarily difficult to pay pension insurance
- Applicable insurance premiums:
- Premium payment due date falls between February 1st 2020 and January 31, 2021
- An application should be submitted by the due date
- For any payment due between February 1, 2020 and June 30, 2020, an application needs to be submitted by the end of June 2020
Pension Insurance Premium Payment Due Date Extension
- Qualifications:
- After February 2020, sales decreases 20% or more, compared with the same month last year
- It is temporarily difficult to pay pension insurance
- Applicable insurance premiums:
- Premium payment due date falls between February 1st 2020 and January 31, 2021
- An application should be submitted within 25 days from the due date
- For any payment due between February 1, 2020 and April 30, 2020, an application needs to be submitted by the end of June 2020
Japan Corporate Tax Relief
- Qualifications For Payment Deadline Deferral For National And Local Taxes
- Decrease in revenue for any period (more than one month) after February 2020 by about 20% or more compared to the same period of the previous year due to the influence of COVID-19
- Facing difficulty paying their national tax in a lump sum
- Payment due dates fall or have fallen between February 1, 2020 and January 31, 2021
- By paying tax, continuity of business will be difficult
- The entity has a sincere intention of paying the taxes in the future
- If the tax payment is due on or before June 30, 2020, the deadline for submission of the application is June 30, 2020. For taxes that are due on or after July 1, 2020, the deadline for submission of the application is by the tax payment due date (There is some flexibility only when there are unavoidable circumstances, but it depends on the judgment of the tax office)
- Deferral can be applied retroactively if taxes are unpaid, and the application form is submitted by June 30, 2020 and approved by the tax office
- All the taxes other than national taxes are paid. Consumption tax is considered as national tax
- Refund By Tax Loss Carry Back
- Normally refunds earned by carrying loss back to previous fiscal years was only available to companies with registered capital of 100 million yen unless owned by a company or group of companies with stated capital of 500 million yen or more
- As a special relief for COVID-19, this tax benefit will be expanded to companies whose stated capital is 1 billion yen excluding companies owned by a corporation with capital of more than 1 billion yen
- For companies with registered capital of 1 billion yen or less, the tax loss carry-back system by tax loss arising during the fiscal year ending between February 1, 2020 and January 31, 2022 can be applied
- Tax Reduction For Capital Investment In Teleworking For Small And Medium Sized Businesses
- Available to small and medium-sized companies whose stated capital of 100 million yen or less. This excludes the following two cases: i. at least 50% of the shares are held by one-large scale company (capital is over 100 million yen); ii. at least two-thirds of the shares are held by large scale companies defined above
- How to apply: i. Obtain confirmation letter from the Bureau of Economy, Trade and Industry before the asset is acquired unless the asset has been acquired in the month February, March, April, May and possibly June; ii. The taxpayer needs to submit an application which has been reviewed/ confirmed by an authorized person approved by the Small and Medium Enterprise Agency in order to obtain the confirmation letter from the Bureau of Economy, Trade and Industry; iii. This relief is considered time-consuming and administratively difficult so the benefit must be weighed with the cost of applying
- Giving Up A Refund To A Culture, Arts Or Sporting Event Can Be Used As A Donation Deduction On Tax Returns
- This is for individuals
- If a company gave up it, it is just treated as tax deductible expense
- Special Rules For Selection Of Taxable Company Status For Consumption Tax
- Where sales for any one month or longer period between February 1, 2020 and January 31, 2021 are decreased by 50% or more compared with that of the prior year, the selection or cancellation of the taxable company status for consumption tax after the start of a taxable period will be permitted
- Tax Exemption Of Stamp Duty On Loan Contracts between Public Or Private Financial Institutions And Companies
- Reduction Of Property Tax Imposed On Depreciable Assets And Houses For Property Owned by A Small And Medium-sized Business
- Available to small and medium-sized companies whose stated capital of 100 million yen or less. This excludes the following two cases: i. at least 50% of the shares are held by one-large scale company (capital is over 100 million yen); ii. at least two-thirds of the shares are held by large scale companies defined above
- Also applicable for individuals who own real estate and earn business income from such real estate
Other Relief We Are Reviewing
- Subsidy for manufacturing, commerce and service capital investment: 10 million yen
- There will be subsidy for manufacturing, retail, wholesale or other business categories, but the details have not been announced yet, it would be announced by the end of April. Investment would be 2 million yen under the current guidance
- IT implementation assistance: coverage rate 50%, up to 4.5 million yen
- To use this program, a company usually apply in advance and needs to use the registered vendor for purchasing PC or providing IT services. However, there is a special program due to Coronavirus, however it needs to apply by May 10th 2020.
- If the service provided or PC purchased from the vendor that has not been registered in this program, they need to register in this program by May 10 2020 as well. The subsidy is based on the amount of expenses of the following: i. The usual program Recovery of supply chain damage (do the IT investment that is necessary to continue supplying products to customers); ii. Change of business model to non-face-to -face (do the IT investment that is necessary to shift to a business model that can provide non-face-to-face and remote service); iii. Do the IT investment necessary to improve the environment of work from home
- Grace for payment of electricity (www.tepco.co.jp) and gas fees
- Those who have received “Emergency small fund/lending of general fund” from each prefecture’s council of social welfare due the suspension of work or unemployment due to Coronavirus, and then applied to electricity or gas company
- Relaxation of import / export procedures
- If the import certificate/export license expires before the end of June, it will be extended to the end of June if a statement of reason is provided
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We hope this information on Japan Financial Relief for Coronavirus is help to anyone who needs it.