Japan to Foster "National Strategic Technologies" from Next Year... "AI, Semiconductors Likely Candidates"

"8% Corporate Tax Deduction for Investments in Factories and Software"

Sanae Takaichi, Prime Minister of Japan. Yonhap News Agency

The Japanese government will designate key technologies as "national strategic technologies" from next year to strengthen support from an economic security perspective. The government also plans to introduce a tax credit system that will deduct 8% of the investment amount from corporate tax when companies invest in factories, software, and other areas.

According to the Nihon Keizai Shimbun (Nikkei) and Yomiuri Shimbun on November 25, the Japanese government plans to designate as national strategic technologies those among 16 "emerging and foundational technologies" that are expected to remain highly important for technological innovation and other reasons beyond the 2030s. These technologies will be reflected in a five-year science and technology policy guideline to be established before March next year.

The six fields most likely to be selected as national strategic technologies are artificial intelligence (AI) and advanced robotics, quantum technology, semiconductors and communications, biotechnology and healthcare, nuclear fusion, and space.

The Japanese government plans to expand tax incentives for research and development costs in these fields and encourage investment. In addition, it will provide support measures such as fostering research and development talent, establishing frameworks for startups and management, and cooperating with friendly countries.

Nikkei explained, "Prime Minister Sanae Takaichi's cabinet has set the realization of a 'nation built on new technologies' as one of its key policy goals," adding, "The government aims to support sectors essential for economic growth and crisis management in order to stimulate private investment."

Additionally, to revitalize regional economies, the Japanese government will also pursue policies to nurture "industrial clusters." It plans to establish a comprehensive strategy for regional revitalization within the year and promote regulatory reforms by utilizing special economic zones.

To further stimulate domestic investment, the government also plans to introduce a tax credit system that will deduct 8% of the investment amount from corporate tax when companies invest in factories, software, and other areas.

Furthermore, for companies whose exports to the United States have declined due to tariff measures imposed by U.S. President Donald Trump, the government is considering a plan to allow tax credits of up to 15% of the investment amount. This measure will be implemented on a temporary basis for five years, and the total tax reduction is expected to reach 500 billion yen (approximately 4.7 trillion won) per year.

This content was produced with the assistance of AI translation services.