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Japan to tax profits on bond sales from January 1

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Staff writer |
Japan bond sales
New rules   The bond sales tax is set at 20.315 percent

From January 1, Japan will tax profits on bond sales and allow investors to cut their tax payments by offsetting gains and losses in bond trading with those in equity transactions.

The bond sales tax is set at 20.315 percent, the same as the tax on profits from equity transactions. The availability of gain-loss offsets between equity and bond transactions is designed to promote shifts from savings to investment, sources said.

Public and corporate bonds in investment trusts, such as money management funds, will become taxable as well.

Previously, many investors held bonds until maturity. But in recent years, not only institutional but individual investors have been actively trading bonds before maturity to take windfall profits.

Under the circumstances, the fairness of taxes has been questioned, as stock sale profits are taxed while bond sale profits are not.

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