According to a recent newspaper report, Japan is considering implementing tax breaks starting in April 2024 for domestically-produced electric vehicle (EV) batteries and semiconductors to bolster economic security.
As part of the government’s fiscal 2024 tax code revision, the Ministry of Economy, Trade and Industry plans to propose these tax cuts for companies that manufacture strategically essential items within Japan. Similar to the U.S. Inflation Reduction Act, this proposed scheme would decrease corporate taxes based on the production of batteries and chips.
The ministry intends to finalize the details, including the eligible items, by the end of this year. The Japanese government typically reviews and amends its tax code each spring, following political consensus on the draft and overall direction by December.