Japan Plans Tax Breaks for 10 Years to Boost EV, Chip Production - Nikkei

The Japanese government is planning to offer tax incentives for a decade to boost mass production in five areas including electric vehicle (EV) production and semiconductor devices manufacturing, Nikkei Asia reported on Wednesday.

Japan's ruling Liberal Democratic Party will include the tax breaks in the fiscal 2024 tax reform framework, which are expected to be finalized as early as this week, the financial newspaper reported.

Other sectors which may receive the 10-year tax benefits include sustainable aviation fuels, green steel and green chemicals, with the EV category also including battery storage.

The tax breaks will include 400,000 yen ($2,750.28) for each EV, 30 yen per liter of sustainable aviation fuel, and 20,000 yen for each tonne of green steel, the Nikkei reported.

For semiconductors, businesses will receive up to a 20% break on the corporate income tax each fiscal year, while for other categories tax break will be capped at 40%.