純資産増加説とタックス・イロジョン

Net Worth Increasing Theory and Tax Erosion

In the current Corporation Tax Act of Japan, there is no clear definition of “taxable income.” It is only described through illustrations as the difference between gross profits and deductible expenses. In comparison, gross profits and deductible expenses were clearly defined in the former Corporation Tax Act Basic Interpretive Regulations as encompassing either increases or decreases in net assets. This shows how the concepts of taxable income, which should be included in the Corporation Tax Act, equate to the “increase of net assets” theory. Rather than simply ignoring the erosion of desired taxable income under a taxation policy, it should be carefully scrutinized in light of the principle of tax fairness. To broaden the tax base, the desired concepts of taxable income must be clearly defined, and from the viewpoint of the principle of tax fairness, an appropriate taxation policy must be decided. Therefore, the increase or decrease in net assets, which was specified in the former Basic Interpretive Regulations, must be clearly defined in the current Corporation Tax Act.