Casino winnings of nonresident foreigners to be untaxed in Japan

Thursday 3rd December 2020

TOKYO (Kyodo) -- In a bid to attract more overseas gamblers, the chief of a ruling Liberal Democratic Party panel said Thursday the winnings of nonresident foreigners at Japanese casino resorts will not be taxed.

Although such resorts have yet to be established in Japan, it is hoped the envisaged tax exemption will provide impetus to operators to plan the "integrated resort" projects -- complexes that incorporate casinos, hotels, conference rooms and shopping malls -- desired by the Japanese government.

Prime Minister Yoshihide Suga promoted the introduction of the casino resorts while in the role of chief Cabinet secretary under his predecessor Shinzo Abe, hoping to lure more foreign tourists to invigorate the economy in the wake of the Tokyo Olympics and Paralympics.

"It would be meaningless if no one comes to the integrated resorts after building them," Akira Amari, head of the LDP's Research Commission on the Tax System, told reporters after a closed-door meeting. He added the casinos must be "on par with international standards."

Casino winnings, also including those of local residents, are not taxed in some European countries such as Britain and Germany as well as Singapore and Macau, two of the world's top casino gambling destinations.

Meanwhile, countries like the United States and South Korea employ withholding tax systems for such gains.

The plan will be included in a tax reform package for fiscal 2021, which is expected to be compiled by the LDP and its junior coalition partner Komeito on Dec. 10.

Under the current system, casino winnings would be taxed in the same way as money won through betting on horse racing.

As for Japanese customers, taxes will be imposed based on the winnings they declare, according to Amari.

Under more liberal gambling laws enacted in 2018, the Japanese government will accept formal applications over a seven-month period from October next year from municipalities bidding to win one of three available integrated resort licenses.

The government had originally planned to start the bid procedure in January 2021, but it decided in October to postpone it for nine months, citing the impact of the coronavirus pandemic.

So far, Yokohama, Suga's constituency, the city of Osaka and Osaka Prefecture, Wakayama Prefecture and Nagasaki Prefecture have declared an intention to bid.

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