PART II Recent Trends and Developments in Government Policies in Education, Science and Culture
Chapter 5. Promotion of Private Schools
Section 2. Measures to Promote Private Schools
5. Tax Systems for Private Schools
Because of their important social role, school corporations that establish private schools are, unless they engage in profit-making activities, exempt from both national taxes, including the corporation tax, income tax, and land price tax, and regional taxes, such as the enterprise tax, municipal inhabitants tax, and fixed asset tax. Other favorable taxation measures include a reduced corporation tax rate on income from profit-making activities.
Private schools also benefit from various other concessional measures under the tax system. For example, donations to school corporations certified as special public interest corporations can be deducted from income up to a certain amount in the case of private donors, while corporate donors can list donations as "special registration of a pecuniary loss." Furthermore, if inherited assets are donated to school corporations, no inheritance tax is due on the assets. In fiscal 1994 quasi-school corporations establishing special training colleges that meet certain criteria became eligible for exemption from inheritance tax.
