The Supreme Court ruled Tuesday that proceeds from exercising stock options should be regarded as a part of salary and thus subject to a higher tax rate than for one-time income.
The top court's first ruling on the matter rejected a suit filed by a former president of the Japan unit of U.S. chip-maker Applied Materials Inc.
Tuesday's decision in favor of tax authorities upheld an earlier ruling by the Tokyo High Court and will probably affect affect similar lawsuits across Japan. There are 102 such suits pending, according to the National Tax Agency.