According to the Nihon Keizai Shimbun Asia website, the Japanese government plans to provide a 10-year tax incentive to promote large-scale production in five fields, including electric vehicles and semiconductor equipment. The ruling Liberal Democratic Party has incorporated these measures into the 2024 fiscal and tax reform framework, which was finalized as early as this week.

It will become a package of preferential policies for strategic areas. The scale of the discount will be proportional to the production and sales volume of eligible products. Other areas that will receive 10 years of tax benefits including sustainable aviation fuels, green steel produced from renewable energy and green chemicals made from plants and recycled waste products. The category of electric vehicles also includes energy storage batteries.

Companies will receive a maximum of 20% corporate income tax reduction for semiconductors per fiscal year. The upper limit for other categories will be set at 40%.

These incentive policies will be effective for 10 years after the business plan is authorized. The government will require companies to submit their plans before the end of the 2026 fiscal year.

Policy makers have also determined the specific content of the "innovation box" tax incentives to attract more research and development centers to come to Japan. For the transfer and licensing income of patents and copyrights, 30% can be deducted from taxable income. It will apply to copyrights and patents obtained from April 2024, and these incentive policies will expire within seven years after April 2025.