Dividends received deduction in Japan
The dividends-received deduction is a tax deduction system applied to a corporation which receive the dividends by other corporations in which it has an ownership stake.
A ratio of dividends received deduction applied varies depending on how much of percentages in shares a
corporation owns.
| Before 2015 Tax reform | |
| Ownership ratio | Amount of dividends received deduction |
| 100% | Total amount of dividend |
|
25% or more ～ under 100% |
Total amount of dividend
less amount of interest expense calculated by the percentage of the investment funded by debt |
| under 25% |
( Total amount of dividend
less amount of interest expense calculated by the percentage of the investment funded by debt ) × 50% |
| After 2015 Tax reform | |
| Ownership ratio | Amount of dividends received deduction |
| 100% | Total amount of dividend |
|
more than 1/3 ～ under 100% |
Total amount of dividend
less amount of interest expense calculated by the percentage of the investment funded by debt |
|
more than 5% ～ less than or equal to 1/3 |
Total amount of dividend ×50% |
| less than or equal to 5% | Total amount of dividend ×20% |