JOINT STATEMENT OF THE ACCJ, ANZCCJ, BCCJ, CCCJ, EBC,IBA JAPAN, ON URGENT FISCAL COUNTERMEASURESTO COMBAT ECONOMIC IMPACT OF COVID-19

The foreign business community welcomes the wide ranging fiscal measurespresented by the LDP (3 April 2020) to benefit corporations and individuals
facing extraordinary financial hardship as a result of COVID-19-related
economic impacts.
In support of this initiative, the foreign business community provides thefollowing suggestions for consideration, based on feedback from members aswell as actions being taken by other national governments. Some of thesesuggestions have already been referred to in the media as under considerationby the Government; however, we include them nonetheless to indicate oursupport for such initiatives.

Introduction of a grace period for all tax filings and payments
To reduce the administrative and time burden, and particularly the health risk
for filings and payments that cannot be made electronically (such aswithholding tax) for both tax authorities and taxpayers as much as possible,
we recommend an automatic deferral of all corporate income tax, consumption
tax, withholding tax (including withholding on salary, interest and dividendpayments) and other tax filings and payments (including property tax). Thisdeferral should apply to any corporate income tax, consumption tax,
withholding tax or other tax that was or will be due from 1 February 2020 to
31 December 2020, including interim tax. In terms of filings, the deferral
should not only cover returns, but also tax reportings, such as shiharaichoshoand CRS (Common Reporting Standards). This grace period of the deferral
should be six months - without the need for demonstration of hardship.
Moreover, 31 December 2019 year-end corporate taxpayers will face the same
cashflow problems as 31 March 2020 year-end taxpayers in the comingmonths, yet are at a disadvantage for having already paid taxes in February or
March 2020. Therefore, taxpayers who have already paid such taxes since 1

February 2020 should be entitled to claim an automatic refund upon electronic
application. We understand that refunds are already being used to mitigate theeconomic impact of COVID-19 in Europe, so such approach is not inconsistent
with those being taken internationally1.
We also recommend that deferral of payment be available for twelve months
for all taxpayers – corporate or individual - who can demonstrate financial
hardship (e.g., demonstrating significantly reduced revenue or losses) as aresult of COVID-19. The requirements for demonstrating hardship should not
be overly burdensome for either taxpayers or the tax authorities. Interest may
be imposed on taxpayers profitable in their subsequent years ending in
FY2020/21, to discourage taxpayers who are able to pay tax from taking
advantage of the grace period.

Deferral of contributions to social insurance
For the period commencing 1 April 2020 and ending 31 March 2021, werecommend that all contributions to social insurance be deferred for employers
and the self-employed without negatively impacting benefit amounts or
calculation of eligibility periods.

Extension of net operating loss carry back for losses arising in fiscal
years beginning on or after 1 January 2018 but before 1 January 2021
We recommend that the one year net operating loss carry back period forsmall and medium sized enterprises be extended to five years for losses arising1

https://www.finanzamt.bayern.de/Informationen/download.php?url=Informationen/Steuerinfos/Weitere_T
hemen/Coronavirus/Anleitung_USt-SVZ.pdf
Anleitung für durch die Corona-Pandemie betroffene Unternehmen zur Beantragung der Erstattung derUmsatzsteuer-Sondervorauszahlung beim Finanzamt Um die durch die Corona-Pandemie betroffenen
Unternehmen bestmöglich zu unterstützen und liquide zu halten, setzen die Finanzämter in Bayern auf
Antrag die Umsatzsteuer-Sondervorauszahlungen für 2020 herab bzw. erstatten diese im Bedarfsfall gar
vollständig wieder zurück.
[Tentative translation: Guidance for companies affected by the Corona pandemic on how to apply forreimbursement of VAT special advance payment. In order to provide companies affected by the Corona
pandemic with the best possible support and to ensure liquidity, the tax offices in Bavaria will, upon request,
suspend special VAT advance payments for 2020 or refund these, even in full, as required.

in fiscal years beginning on or after 1 January 2018 but before 1 January 2021,
to provide further relief for smaller corporate taxpayers. In addition, wewelcome the proposed measures to extend the loss carry back to companies
with capital of JPY1 billion or less, and suggest that such extension coverlosses arising in the fiscal years beginning on or after 1 January 2018 but
before 1 January 2021 for two years. In addition, we recommend eliminating
the minimum taxation rule (“haircut”) applicable to the use of losses carriedback during this period.

Relief from certain reporting requirements during periods of remote
working
Many companies are required to report to or file documents with theGovernment, which must be prepared onsite at corporate premises due toregulatory restrictions or legal requirements to stamp with company seals
stored at corporate premises. As more corporations move to remote working,these regulatory requirements place significant burden on them, particularly as
they try to protect the health of their employees. While some relaxation has
already been provided for by the late filing of corporate income tax andconsumption tax returns upon application to the Government, we recommend
broader measures, to include either extended reporting deadlines as describedabove, or the acceptance of electronic reporting, without the requirement todemonstrate hardship. The acceptance of electronic reporting would include
easing the requirements for wet signatures or company seals, and for original
document delivery; that is, alternative approaches such as e-signatures, emailconfirmations, PDFs, etc. would be acceptable. The US has just announced
similar measures, to facilitate the remote working of IRS employees2.

Other fiscal related subsidies and benefits
Our focus is on tax policy measures, but we emphasize that the foreignbusiness community fully endorses fiscal and other measures taken by theGovernment to support both the business community and individuals while theeconomy is impacted by COVID-19, including the extension or introduction ofsubsidies to retain employees and measures taken to facilitate increased2

https://www.pwc.com/us/en/tax-services/publications/insights/assets/pwc-irs-relaxes-some-signaturerequirements.pdf

remote working. We also strongly urge the Government to continue to change
its own work environment and business processes to better facilitate remote
working, to increase protection of the health of Government employees. We
would also ask that whatever fiscal or other measures are made available by
the national or local governments be available equally to foreign residents as
to Japanese nationals.
As members of Japanese society ourselves, the foreign business community iscommitted to supporting the Japanese Government as it navigates the country
through this difficult period.

------------The American Chamber of Commerce in Japan (ACCJ) www.accj.or.jp
The Australian and New Zealand Chamber of Commerce in Japan (ANZCCJ)
https://www.anzccj.jp
The British Chamber of Commerce in Japan (BCCJ) https://bccjapan.com
The Canadian Chamber of Commerce in Japan (CCCJ) https://www.cccj.or.jp
European Business Council in Japan (EBC) www.ebc-jp.com/
International Bankers Association of Japan (IBA Japan) www.ibajapan.org/