There have been several significant developments recently affecting the NPO sector in Japan. Tax provisions implemented in October 2001 set the bar for tax deductibility so high that only ten NPOs satisfied the criteria. To qualify, NPOs had to conduct activities in multiple municipalities and have donations accounting for more than one-third of revenues qualified. The most recent revisions, applicable from 1 April 2003, reduce this amount to one-fifth of total revenues.

The NPO Law (1998) has been changed to facilitate the incorporation of NPOs (from 1 May 2003). The amendments include permitting five more fields of activity (raising the total to 17) and simplifying the application procedure. The Government has also drawn up a plan for reforming the legal framework for public interest corporations in Japan. This would abolish the discretionary ‘approval system’ for such organizations and set new quantitative tests (the amount of ‘social contribution’) for their qualification for tax-deductible contribution status.

Reported in APPC Post, the newsletter of the Asia Pacific Philanthropy Consortium. It can be accessed on APPC’s website at http://www.asianphilanthropy.org
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