December 20, 2019 Notice on Response to the Abolition of the Connected Industries Tax System (IoT tax System)

In the fiscal 2020 Japan tax reform outline approved by the Cabinet today, the special depreciation or tax credit system under the Connected Industries Tax System (IoT Tax System) will be abolished on March 31, 2020. However, if a corporation or similar entity will be subject to transitional measures to apply for the current taxation if the corporation or the similar entity has been accredited by March 31, 2020, obtains and uses innovative information industry utilization facilities on the accredited innovative data industry utilization plan by March 31, 2021.
On the premises of the above, from the viewpoint of the timely completion of accreditation under Article 22 of the Act on Special Measures for Productivity (Act No. 25, 2018), which is a condition for utilizing this tax system. Therefore, as described below, projects that have undergone the necessary procedures during the prescribed period (hereinafter referred to as “transitional response period”) will be examined preferentially.
For specific procedures, refer to the PDF link. In the future, more detailed explanations and information may be announced on the websites specified below as needed.

1．Transitional response period

Monday, January 6 through Friday, February 14, 2020

2．Required procedures

It is necessary to take necessary procedures while satisfying certain requirements during the transitional response period.

3．Points to be kept in mind

Performing the required procedures within the interim response period does not guarantee that the accreditation will be made by March 31, 2020. During the review process, if the application does not meet the accreditation criteria or if the applicant cannot appropriately respond to inquiries about the application, the accreditation may not be possible by March 31, 2020.
Besides, it should be kept in mind that applications for accreditation will be accepted after the transitional response period, but it will take longer than usual for accreditation, and it is assumed that accreditation will not be possible by March 31, 2020.