Tax Deductions for Art Gifts - Japan

Japanese Tax system allows several tax benefits for the Promotion of Arts and Culture, including:

Corporation tax: A contribution made by a corporation is generally calculated as a charitable donation, with an amount of equivalent value also being calculated as a loss.

Personal income tax: The value of the contribution is deducted from the individual's income.

Special deductions from capital gains tax:An individual or corporation that transfers land designated as an important cultural property together with its building(s) or transfers land designated as a historical site, place of scenic beauty, or a natural monument to the national or local government or to specific IAIs (a national museum or national science museum), either a special deduction or a loss of ¥20 million shall be sanctioned.  Income tax: special deduction of ¥20 million Corporation tax: loss of ¥20 million.

Exemption from tax on capital gains income: If an individual transfers a movable asset or building designated as an important cultural property to the national or local government, the associated capital gains shall not be subject to income tax.  Income tax: exempt.  If an individual transfers a non-designated tangible cultural property, which has a value judged equal to that of an important tangible cultural property or is an important tangible folk property to the either the national government or to specific IAIs (a national museum, a national art museum, or national science museum), half of the capital gains shall be deducted.  Income tax: levied on 50% of the capital gains (100% exempt from Apr 1972 to Dec 1992)

Exemption and Reduction of inheritance tax: Inheritance tax is not imposed on donations of inherited properties or the like to corporations that mainly aim to disseminate the arts or to protect cultural properties and that are so authorized by the Minister of Education, Culture, Sports, Science and Technology. This also applies to donations made to the Japan Arts Council, National Language Research Institute, national art museums, national museums, and national research institutes of cultural properties. Inheritance tax: exempt.

Designated donations: Within a year after applying to donate a national treasure or important cultural property to national museum, national art museum, or national science museum, if a corporation makes a donation (of money or other assets) to meet expenses required for the collection or conservation of the national treasure or important cultural property concerned, the entire value of the latter donation may be calculated as a loss due to an individual designation by the Minister of Finance.  Corporation tax: the value of the donation is calculated as a loss.

You can obtain more information on Cultural Gifts Tax Benefits in Japan by visiting http://www.mof.go.jp/english/zei/report/zc001a.htm