Various terms are posted in the M & A dictionary such as progressive taxation and corporate divestiture. The tax rate applied when conducting progressive taxation is the tax rate called the progressive tax rate. The progressive tax rate refers to the tax rate for imposing a progressive tax which is a tax to which a high tax rate is applied as taxation standards increase, such as gift tax, income tax, inheritance tax. On the other hand, the tax rate applied to fixed asset materials, consumption tax, corporate tax, etc. for progressive tax rates, regardless of the size of taxation standards, is called proportional tax rate. This progressive tax rate is now changing at a fixed rate according to income. The percentage has been revised each time, now it is in 5% increments. Taking income tax as an example, if the annual income is 1.95 million yen or less, the taxation rate is 5%, and 5% of income becomes income tax as it is. Also, if you are over 1.95 million yen to 3.3 million yen, the taxation rate will be 10%. However, the deductible amount is determined from this amount, in which case the deductible amount will be 97,500 yen. This means that the tax deducting 97,500 yen from income tax calculated by 10% tax rate will be income tax. This deduction increases as the tax rate rises. For example, the amount of deduction for persons over 3.3 million yen to 695 million yen has increased to 427,500 yen.
Two types of progressive tax rates
There are two kinds of progressive tax rates. First of all, it is called excessive progressive tax rate. This is a method of calculating a certain amount when dealing with income and calculating tax by multiplying only the amount exceeding that amount by the prescribed tax rate. Let’s say that 150 thousand yen is the reference amount, for example. If the amount to be handled is 200,000 yen, if it is a simple formula it is placing a tax on the full amount of 200,000 yen, but if it is an excess formula, only the excess amount of 50,000 yen will be the amount to be calculated for the tax rate. For income subject to comprehensive taxation, the excessive progressive tax rate is adopted, and income tax is imposed at a higher tax rate for higher income earners who have many business income, real estate income, salary income and so on. The other is called simple progressive tax rate. This is used to calculate income tax and other taxes by multiplying the entire income by the prescribed tax rate. Since calculation is easy to understand method, it is used in many aspects.