Abstract
Government approved nonprofit corporations are automatically afforded preferential tax treatment in Japan. In contrast, recently institutionalized specified nonprofit corporations under the NPO law and the public interest corporation law are not afforded preferential tax treatment without acceptance of standards for public interest that are measured by citizen participation through donations or volunteers. This new system is remarkable for the Japanese tax system for nonprofit corporations since it is expected to exclude the discretion of the governing authority and to introduce citizens' valuation instead. However, the valuation of donations that is applied to nonprofit organizations under the NPO law has been amended seven times within ten years without sufficient verification, and the initial objective of the policy to promote citizen participation has been distorted. On the other hand, the valuation of volunteers is applied to the foundations and associations under the new public interest corporation law, but this valuation system has not been arranged yet. A unified accreditation system for the tax exempt status of nonprofit corporations should be established through cautious investigation of the effectiveness and influence of the system.
