Historical Change on Deductible Expense and Depreciation Charge in Corporate Income Tax Law and Changing Opinion on this Subject by the Tax Authorities
Corporate taxable income (法人課税所得)
Deductible expense (総損金)
Depreciation charge (減価償却費)
Table of Useful Life of Fixed Assets (固定資産堪久年数表)
Indirect method of depreciation (減価償却の間接法表示)
This paper deals with the relationship between deductible expense and depreciation charge as stated in Japan's income tax law from 1899 to 1935. At that time，the tax authorities did not consider depreciation charge to be a deductible expense，although they thought that the decreasing value of assets by commercial law was a deductible expense. In 1908 and 1910，the Japanese government submitted a bill to the Diet suggesting that depreciation charge should be considered as a deductible expense. However，the bill was not approved by the Diet，but the tax authorities administration continued to handle this issue. In 1918，they drew up ''Table of Useful Life of Fixed Assets'' and based on this table，they viewed depreciation charge as a deductible expense. However，they did not approve the indirect method of depreciation，because it could be identified as reserved income or accumulated fund.