Foreigners To Get Tax Exemptions For Returns On Corporate Bonds

The government Tax Commission has decided to waive taxes on interest income earned on Japanese corporate bonds held by overseas investors, according to Nikkei. Currently, such income on corporate bonds issued in Japan is taxed at a hefty 15%, a factor contributing to a lack of interest in Japanese corporate bonds among foreign investors. The tax break will be a temporary measure lasting three years starting in fiscal 2010. The commission, however, is planning to continue to tax interest earned by overseas affiliates holding bonds issued by Japanese firms.