The Cabinet approved a bill Friday to revise the tax code for the introduction of a consolidated tax system aimed at reducing companies' tax burdens and boosting competitiveness.
The bill was sent to the Diet, and the revisions necessary to launch the system are scheduled to be approved during the current legislative session. The government hopes to enact the consolidated taxation system on Aug. 1. The revisions will be made retroactive to April 1.
Under the consolidated tax system, taxes are calculated based on the combined profits or losses made by a group. Thus, losses from one company can be set against the profits of another group company for tax purposes, reducing the burden on the corporate group as a whole.