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Requests on Tax Reform for FY2016
17 July, 2015
The Life Insurance Association of Japan, LIAJ (Chairman: Yoshinobu Tsutsui, President of Nippon Life Insurance Co.) released the requests on tax reform for fiscal year 2016.
The summary of our requests is as follows.
- In order to improve the environment to promote the independence and self-help efforts of people with the aim of establishing a sustainable social security system, the tax deduction scheme for life insurance premiums should be expanded, following the on-going review of the social security system.
- Deductible limits of insurance premiums from taxable income should be raised to 50 thousand yen fornational income tax and to 35 thousand yen for local income tax for each category of life insurance products(i.e. life insurance, long-term/medical insurance and individual annuity).
I. Corporate Pension Insurance
- The special corporate tax should be abolished for reserve funds of both corporate pension plans (i.e. defined benefit corporate pension plans and employees' pension fund plans) and defined contribution pension plans which complement the public pension system.
- The contributions of employers to past service liabilities under defined benefit corporate pension plans and employees' pension funds should be treated flexibly to promote the rapid building of sound pension finance.
- The condition for lump-sum withdrawal payment at the time of retirement on corporate types of defined contribution pension plans should be relaxed.
II. Life Insurance Contracts
- In order to secure living funds for survivors, the exemption limit for inheritance tax on death benefits which are paid based on the principle of mutual assistance, should be as follows: the sum of [¥5 million in death benefits received by the spouse] plus [(¥5 million in death benefits received by an underage dependent legal heir) multiplied by (the number of such dependent heirs)], together with the current limit (¥5 million multiplied by the number of legal heirs).
III. Asset Management
- Taxation related to real estate should be comprehensively re-examined.
- The current formula for calculating the local corporate tax of a life insurance business should be maintained.