National Tax Agency (NTA)Withholding, year-end adjustment & payFor year-end adjustments made on or after December 1, 2026 (Reiwa 8)According to an NTA leaflet, the payment due date for withholding income tax on the 2026 (Reiwa 8) year-end adjustment is Tuesday, January 12, 2027 (Reiwa 9), or Wednesday, January 20 if the special payment due date arrangement has been approved. The deadline for issuing and submitting withholding slips and similar documents is Monday, February 1, 2027 (Reiwa 9).A company holds back "prepaid tax" from each month's pay. But after a year, the total of those prepayments can be different from the tax you really owe. Recalculating that difference at the end of the year is called the "year-end adjustment" (nencho), and it has set dates.
Read more →National Tax Agency (NTA)Withholding, year-end adjustment & payEffective December 1, 2026 (Reiwa 8); applies to income tax for 2026 (Reiwa 8) and later yearsUnder the FY2026 (Reiwa 8) tax reform, the basic deduction under the Income Tax Act has been raised from JPY 580,000 to JPY 620,000, and the deduction amounts combined with the add-ons based on total income have also been revised. In principle it takes effect on December 1, 2026 (Reiwa 8) and applies to income tax for 2026 (Reiwa 8) and later years. There is no change to withholding procedures up to November 2026 (Reiwa 8).Tax is charged on what is left after you first subtract a "basic allowance" from a year's earnings. This basic allowance is called the "basic deduction", and it gets a little bigger from 2026 (Reiwa 8). The bigger the allowance, the smaller the part that is taxed.
Read more →National Tax Agency (NTA)Consumption tax & invoicesFrom October 1, 2026 (Reiwa 8)For taxable purchases from persons other than qualified invoice issuers, the transitional measure that allows part of the input tax amount to be deducted has been extended by 2 years and the percentages revised. It is 70% for 2 years from October 1, 2026 (Reiwa 8), then falls step by step, and is 0% from October 1, 2031 (Reiwa 13).There is a special rule that lets you subtract only part of the consumption tax you paid when you bought from someone who does not issue an invoice, a bill with a registration number. From October 2026, this share becomes 70%, and then it shrinks little by little.
Read more →National Tax Agency (NTA)Consumption tax & invoicesFor 2 years from April 1, 2027 (Reiwa 9) to March 31, 2029 (Reiwa 11)The NTA announces that for 2 years from April 1, 2027 (Reiwa 9) to March 31, 2029 (Reiwa 11), the consumption tax rate (national and local combined) on the supply of food and beverages will be reduced to 1%. Currently the standard rate is 10% and the reduced rate is 8%, and dining out and catering are not covered by the reduced rate.The consumption tax on food you buy at supermarkets and similar places is now 8%. The NTA announces that for 2 years from April 1, 2027, it will be cut to 1%. Dining out and catering are not covered by the current 8% rate either.
Read more →Small and Medium Enterprise AgencyGrants & subsidiesDeadline (per the project schedule): October 30, 2026 (Reiwa 8), 5:00 p.m.This subsidy supports the adoption of IT tools, including AI, to raise labor productivity at small and medium-sized enterprises and small business operators. Under the FY2025 (Reiwa 7) supplementary budget program, the former "IT adoption subsidy" (IT導入補助金) was renamed. According to the project schedule, the latest confirmed deadline for the regular category and others is October 30, 2026, 5:00 p.m., with grant decisions planned for December 10.There is a program where the government pays part of the cost when a company starts using software or AI that makes work easier. It used to be called the "IT adoption subsidy" (IT導入補助金), but the name changed because AI was added.
Read more →National Tax Agency (NTA)Corporate & income taxFor business years beginning on or after April 1, 2026 (Reiwa 8)For business years beginning on or after April 1, 2026 (Reiwa 8), corporations subject to corporate tax become taxpayers of the special corporate tax for defense. The tax is 4% of the corporate tax amount (calculated without applying credits such as the income tax credit) minus an annual JPY 5,000,000 deduction. It is filed and paid separately from corporate tax and local corporate tax.From business years starting in April 2026, a new tax has been added to the taxes that companies pay. It uses the company's corporate tax as a starting point, subtracts a set amount, and then the company pays 4% of what is left. Even if the tax comes out to zero, the company still has to file the paperwork.
Read more →National Tax Agency (NTA)Consumption tax & invoicesThrough the taxable period that includes September 30, 2026 (Reiwa 8)The "20% special rule" lets a formerly tax-exempt business operator that became a qualified invoice issuer and a taxable business operator limit its tax payable to 20% of the tax on sales. The last taxable period it covers is the one that includes a day up to September 30, 2026 (Reiwa 8). From the next period, you need to consider filing under the general method or the simplified method.The 20% special rule is a rule that greatly reduces the consumption tax paid by people who run a small business and newly registered for the invoice system. You can use it only up to the period that includes September 30, 2026 (Reiwa 8).
Read more →National Tax Agency (NTA)Local taxes & proceduresPeriod 2 is November 1 to November 30People whose estimated tax base amount is JPY 150,000 or more must make estimated tax payments, prepaying part of that year's income tax. Period 1 runs from July 1 to July 31 and Period 2 from November 1 to November 30, and each payment is in principle one-third of the base amount. The tax office sends a notice by June 15.A sole proprietor whose tax was large last year prepays part of this year's tax in two installments, in July and November. Each installment is one-third of an amount based on last year's tax. The rest is worked out properly in the spring tax return.
Read more →National Tax Agency (NTA)Withholding, year-end adjustment & payFor commuting allowances due to be paid on or after April 1, 2026 (Reiwa 8)For the tax-free limit of commuting allowances paid to people who commute by car, bicycle or other means, the categories of 65 km or more one way have been raised, and people who bear certain parking fees can add the amount equal to the parking fee (up to JPY 5,000). It applies to commuting allowances due to be paid on or after April 1, 2026 (Reiwa 8).Commuting money paid by a company is not taxed up to a set amount. For people who commute by car or bicycle, the limit for very long distances has been raised, and the parking fee, up to JPY 5,000, can now be added on top.
Read more →Japan Fair Trade Commission (JFTC)Trade rules & company lawIn effect from January 1, 2026 (Reiwa 8)On January 1, 2026 (Reiwa 8), the Subcontract Act took effect with a new law name and nickname as the "Toriteki Act (Act on Proper Transactions with Small and Medium Contractors)". The main amendments are a ban on unilaterally deciding the price without responding to price consultation, a ban on payment by bill and similar methods, a criterion based on the number of employees, and the addition of specified transportation commissions.The rules between big companies that ask for work and small companies that are asked to do it became new on January 1, 2026. More rules were added so that weaker companies are not treated unfairly.
Read more →National Tax Agency (NTA)Corporate & income taxAssets confirmed by the Minister of Economy, Trade and Industry during the period from the effective date of the Act Partially Amending the Industrial Competitiveness Enhancement Act and related Acts through March 31, 2029 (Reiwa 11)The fiscal 2026 (Reiwa 8) tax reform created a system under which, when a company acquires specified productivity-enhancing equipment confirmed by the Minister of Economy, Trade and Industry, of at least a certain scale, and places it into service for business, it can choose either immediate depreciation or a tax credit of 7% of the acquisition cost (4% for buildings and the like). The NTA materials are based on laws and regulations as of May 27, 2026 (Reiwa 8).A new system is being created that lowers taxes for companies that make large purchases of new machines and equipment meeting the government's conditions. A company can choose either to count the full price as an expense in the year it buys, or to subtract 7% of the price from its tax. Some details, such as dates and conditions, are not yet fully decided.
Read more →National Tax Agency (NTA)Tax-saving informationPay a corporation gives to its officers is not deductible as an expense (sonkin) to the extent that it falls under none of fixed-amount periodic pay, pay with advance fixed-amount notification, or certain performance-linked pay. Even if it falls under one of them, any unreasonably high portion is not deductible. For mid-year changes and for how bonuses are paid, the requirements and notification deadlines need attention.A company can treat the money it pays to its president or other officers as an expense only when it is paid in a set form. The most basic form is paying the same amount every month. If it is paid on set days like a bonus, you must report it to the government office beforehand. If the amount is changed on a whim, it is no longer accepted as an expense.
Read more →National Tax Agency (NTA)Tax-saving informationFor a retirement allowance, the retirement income deduction based on years of service is subtracted, and half of the result becomes the amount of retirement income, which is taxed separately from other income. However, there are special rules limiting the one-half rule for specified executive retirement allowances (where service as an executive is 5 years or less) and short-term retirement allowances (short service).If the retirement pay you get when leaving a company were taxed the same way as your regular pay, the tax would be far too heavy. So there is a rule that lets people who worked longer subtract more, and then the leftover is cut in half before tax is figured. This is not a trick; it is a system set by the government.
Read more →Small and Medium Enterprise AgencyGrants & subsidiesRound 8 closed on October 16. Round 9 is scheduled to open for applications in early NovemberThis subsidy covers part of the cost for small and medium-sized businesses struggling with labor shortages to introduce equipment such as IoT and robots. Applications for Round 8 closed at 17:00 on October 16. Round 9 is announced as scheduled to open for proposals in early November, accept applications from early December, and close in late December. The upper limit ranges from JPY 7.5 million to JPY 80 million depending on the number of employees.When a company that has too few workers tries to make its work easier with machines or computers, the government pays part of the cost. The condition is that the company raises pay by the amount the work became easier.
Read more →National Tax Agency (NTA)Corporate & income taxFor assets acquired on or after April 1, 2026 (Reiwa 8)For the special provision allowing SMEs to deduct low-value depreciable assets as expenses, the acquisition cost threshold has been raised from under JPY 300,000 to under JPY 400,000 for assets acquired on or after April 1, 2026 (Reiwa 8), and the application period has been extended by 3 years. On the other hand, corporations with more than 400 regularly employed workers have been excluded from eligibility.Computers and chairs a company uses for work are usually counted as expenses little by little over many years. But small companies have a rule that lets them expense cheaper items all at once in the year they buy them. The line for "cheaper" has moved up from under JPY 300,000 to under JPY 400,000.
Read more →National Tax Agency (NTA)Withholding, year-end adjustment & payGeneral life insurance premium deduction for 2026 and 2027 (Reiwa 8 and 9)Starting with the year-end adjustment for 2026 (Reiwa 8), a special rule is introduced for the general life insurance premium deduction for taxpayers with dependents under age 23. For new life insurance premiums in 2026 and 2027 (Reiwa 8 and 9), the deduction is calculated using a set table, and the cap on the general life insurance premium deduction becomes JPY 60,000 (JPY 40,000 before the revision).If you pay for life insurance, that amount can be subtracted when taxes are calculated. For people who support a family member under age 23, the upper limit of what can be subtracted rises from JPY 40,000 to JPY 60,000, but only for 2026 and 2027.
Read more →Ministry of Health, Labour and Welfare (MHLW)Labor law & HRIn force from June 1, 2020 (Reiwa 2); obligatory for SMEs from April 1, 2022 (Reiwa 4)Taking the measures needed in employment management to prevent workplace power harassment has been an employer obligation since June 1, 2020 (Reiwa 2), and since April 1, 2022 (Reiwa 4) for small and medium-sized enterprises. The MHLW sorts typical examples into 6 types and also publishes revised guidelines that apply from October 1, 2026 (Reiwa 8).When someone with more power at work goes beyond the limits of the job and bullies or hurts another person, it is called power harassment. Companies are required to take steps so that it does not happen. The government shows 6 common forms.
Read more →National Tax Agency (NTA)Withholding, year-end adjustment & payIncome tax for 2026 (Reiwa 8) onward (special calculation applies to 2026 and 2027 (Reiwa 8 and 9))The minimum amount of the employment income deduction was raised from JPY 650,000 to JPY 740,000. For 2026 and 2027 (Reiwa 8 and 9), where salary income is JPY 691,000 or more but less than JPY 2.2 million, employment income is calculated by a separate formula, and the NTA's year-end adjustment "Table of salary amounts after employment income deduction" incorporates this.For wages from a company, there is a rule called the "employment income deduction" that lets you subtract a set amount as the cost of working. Even if your income is low, the minimum amount you can subtract rose from JPY 650,000 to JPY 740,000. So the part that gets taxed becomes smaller.
Read more →National Health Insurance Association (Kyokai Kenpo)Social insurance & pensionsFrom the March 2026 (Reiwa 8) month (payable in April)Kyokai Kenpo's average premium rate for fiscal 2026 (Reiwa 8) was lowered by 0.1 point from 10% in the previous year to 9.9%. Health insurance premium rates by prefecture are revised from the March 2026 month (payable in April), and the long-term care insurance premium rate is a uniform 1.62% nationwide (1.59% in the previous year).In the health insurance you join through your company (Kyokai Kenpo), the premium is paid by multiplying your pay by a set percentage. For fiscal 2026, the national average went down very slightly, from 10% to 9.9%.
Read more →Ministry of Health, Labour and Welfare (MHLW)Grants & subsidiesApril 1, 2026 (Reiwa 8) to March 31, 2027 (Reiwa 9)The employment insurance premium rates for April 1, 2026 (Reiwa 8) to March 31, 2027 (Reiwa 9) have been published. For general businesses, the worker share is 5/1000 and the employer share is 8.5/1000, a total of 13.5/1000, down from 14.5/1000 in FY2025 (Reiwa 7). Payroll staff should check the rates they use.People who work at companies put in a set share of their pay for insurance that prepares for times like losing a job or taking childcare leave. In FY2026 (Reiwa 8), this share went down a little from the year before.
Read more →Children and Families Agency / Kyokai Kenpo (National Health Insurance Association)Social insurance & pensionsFrom the April 2026 (Reiwa 8) premium (deducted from May salary)The Child and Child-Rearing Support Contribution system starts in fiscal 2026 (Reiwa 8). Under employees’ insurance, contributions are made from the April 2026 premium (deducted from May salary). The FY2026 contribution rate is a uniform 0.23% nationwide. The amount is the standard monthly remuneration multiplied by the contribution rate, and in principle the company bears half.To support families raising children as a whole society, the “Child and Child-Rearing Support Contribution” started in fiscal 2026. Company employees pay a little from their pay, together with their health insurance premium.
Read more →Ministry of Health, Labour and Welfare (MHLW)Social insurance & pensionsPhased in from October 2027, through October 2035The company size requirement (number of employees) for enrolling short-time workers in social insurance will be expanded in stages from the current 51 or more: 36 or more in October 2027, 21 or more in October 2029, 11 or more in October 2032, and workplaces with 10 or fewer in October 2035.Whether part-time workers can join a company's social insurance also depends on how many people the company has. Today it applies to companies with 51 or more people, but this line will be lowered every few years, and in the end it will reach companies with few people.
Read more →National Tax Agency (NTA)Corporate & income taxFor business years beginning on or after April 1, 2026 (Reiwa 8) (the revised ratio for the general type applies to business years beginning on or after April 1, 2027 (Reiwa 9))The FY2026 (Reiwa 8) tax reform revised the R&D tax credit. A new tax credit for research costs of priority industrial technologies was created, and the credit ratio for the general type is also revised for business years beginning on or after April 1, 2027 (Reiwa 9). For research commissioned overseas, the share eligible for the credit falls in stages.There is a system that lets a company subtract part of its research spending on new products and technologies from its corporate tax. The FY2026 (Reiwa 8) review set a new system for important fields such as AI and quantum technology. When research is handed to someone overseas, the share you can subtract shrinks little by little.
Read more →National Tax Agency (NTA)Consumption tax & invoicesFrom taxable periods beginning on or after October 1, 2026 (Reiwa 8)The transitional measure for taxable purchases from suppliers that are not qualified invoice issuers has a cap on annual purchase amounts. For taxable periods beginning on or after October 1, 2026 (Reiwa 8), the cap is lowered from JPY 1 billion to JPY 100 million.There is a special rule that lets you deduct part of the consumption tax on purchases from shops that do not issue invoices, and it has a limit per shop. From periods starting in October 2026 (Reiwa 8) or later, that limit drops sharply from JPY 1 billion to JPY 100 million.
Read more →National Tax Agency (NTA)Corporate & income taxOn and after April 1, 2026 (Reiwa 8) (the Management Strengthening Tax Incentive is judged by the date of acquisition etc.; the Investment Promotion Tax Incentive by the last day of the business year)Under the FY2026 (Reiwa 8) reform, the acquisition cost requirement for tools, equipment and fixtures under the SME Management Strengthening Tax Incentive was raised from JPY 300,000 to JPY 400,000, and the per-unit requirement for tools under the SME Investment Promotion Tax Incentive was likewise raised from JPY 300,000 to JPY 400,000. The change is in step with the raised threshold of the special rule for small-value depreciable assets.There are systems that lower a company's taxes when it buys new machines or tools. The "minimum price" for tools to qualify has gone up from JPY 300,000 to JPY 400,000. The new line applies to things bought on or after April 1, 2026.
Read more →National Tax Agency (NTA)Tax-saving informationIf the medical expenses you paid between January 1 and December 31 of the year for yourself or for a spouse or relatives who share your livelihood exceed a certain amount, you can receive an income deduction through a tax return filing (kakutei shinkoku). The deduction is the total medical expenses paid, minus reimbursements such as insurance benefits, minus JPY 100,000 (or 5% of total income for people whose total income is under JPY 2 million), up to a maximum of JPY 2 million.When your family's hospital and medicine costs add up to a lot in one year, the part over a certain amount can be subtracted from the base amount used to calculate your tax. You can use it by doing a procedure called a tax return (kakutei shinkoku). It is a system allowed by the rules, so you can use it with confidence.
Read more →Ministry of Health, Labour and Welfare (MHLW)Labor law & HRIn force from October 1, 2025 (Reiwa 7)Under the amended Childcare and Family Care Leave Act in force from October 2025 (Reiwa 7), employers must choose and provide at least two of five measures for employees raising a child aged 3 up to elementary school age. They must also individually notify employees and confirm their intentions before the child turns 3, and listen to and give consideration to individual wishes about balancing work and childrearing.Companies must now prepare several easy-to-use options, such as shifting working hours or working from home, for people who work while raising children. Before a child turns 3, the company also explains these options.
Read more →National Tax Agency (NTA)Local taxes & proceduresFor changes of tax payment place etc. on or after April 1, 2017 (Heisei 29)When a corporation's tax payment place changes, for example by relocating its head office, the notification of change need only be submitted to the head of the tax office that had jurisdiction before the change, for changes on or after April 1, 2017 (Heisei 29). Previously it had to be submitted to both the pre-change and post-change tax offices. The consumption tax notification of change is treated the same way.When a company moves to a new place, the tax office in charge of it can change too. In that case, you submit a notice saying "we moved." Now you only submit it to the tax office where the company was before the move, not to the tax office at the new place.
Read more →National Police AgencyTrade rules & company lawJuly 10, 2026 (Reiwa 8) (penalties) / April 1, 2027 (Reiwa 9) (IC chip reading)The National Police Agency has published guidance on the amendment of the Act on Prevention of Transfer of Criminal Proceeds (promulgated June 10, 2026 (Reiwa 8)). The higher penalties for the improper transfer of savings passbooks and the new remittance offense take effect on July 10, 2026. From April 1, 2027 (Reiwa 9), identity verification for opening an account and similar procedures will require reading the IC chip information of the My Number Card or similar cards.Bad people use bank passbooks handed over by others for crimes, such as when someone gives away a passbook. To stop this, the punishments have become heavier. From next year, when you open an account, your identity will be checked by reading the IC chip in your My Number Card.
Read more →Ministry of Health, Labour and Welfare (MHLW)Grants & subsidiesApplications from September 1, 2026 (Reiwa 8)This scheme subsidizes part of the costs for small and medium-sized enterprises and small businesses that raise their in-workplace minimum wage by JPY 50 or more and invest in equipment and the like that improves productivity. In FY2026 (Reiwa 8) the maximum is JPY 6,000,000, and the subsidy rate is 4/5 if the in-workplace minimum wage is below JPY 1,050 and 3/4 if it is JPY 1,050 or more.This is a program where, if a shop or factory raises the lowest hourly pay by JPY 50 or more and buys machines and the like that make work faster and easier, the government pays part of the cost. The amount you receive changes depending on how much you raise the hourly pay.
Read more →National Tax Agency (NTA)Withholding, year-end adjustment & payApplies to salaries and other pay paid on or after December 1, 2026 (Reiwa 8)Following the increase in the basic deduction, the total income requirement for dependents, spouses living on the same household budget, and children of single parents living on the same household budget has been revised to JPY 620,000 or less (JPY 580,000 or less before the revision). If, because of this revision, there are relatives who newly meet the requirement, the "Employee's Declaration of Dependent Deduction (Change)" or similar form must be submitted to receive the dependent deduction.If you support your family, there is a rule that lets you pay less tax when a family member earns only a little. The line for "a little" has moved up: for someone with only salary income, it went from JPY 1,230,000 to JPY 1,360,000 a year, so some people newly qualify.
Read more →National Health Insurance Association (Kyokai Kenpo)Social insurance & pensionsSubmission deadline: Friday, December 11, 2026 (Reiwa 8)To ensure proper insurance benefits, Kyokai Kenpo checks whether dependents still meet the requirements. From late October to mid-November 2026 (Reiwa 8), dependent status lists are mailed in turn to workplaces with applicable persons, and the submission deadline is Friday, December 11, 2026.Once a year, Kyokai Kenpo checks whether people covered as dependents on a family member's health insurance still meet the conditions. Papers arrive at companies in autumn, and must be returned by December 11 this year.
Read more →National Tax AgencyElectronic books & digitizationThe 10% heavier penalty exclusion applies to national taxes whose statutory filing deadline falls on or after January 1, 2027 (Reiwa 9); the JPY 750,000 blue return special deduction applies to income tax for 2027 (Reiwa 9) and laterUnder the fiscal 2025 (Reiwa 7) tax reform, the Electronic Books Maintenance Act gained a new system for setups that automatically save electronic transaction data such as invoices and link it automatically to the books. If certain requirements are met and a notification is filed, the business is excluded from the 10% increase in the heavier penalty tax (jukazanzei), and for sole proprietors it also becomes a requirement for the JPY 750,000 blue return special deduction.The government has set up a system that links invoice data straight into the books without anyone retyping it. If you link it automatically in a way that is hard to cheat, it reduces mistakes and also gives you more favorable treatment under the tax rules.
Read more →National Tax Agency (NTA)Electronic books & digitizationWhen invoices, receipts and similar documents are exchanged as electronic data, you are obliged to keep that data in electronic form. The NTA leaflet (June 2026) presents the retention requirements as two pillars: ensuring authenticity and ensuring visibility. It can be used first to check whether the way your business receives and stores data meets these requirements.An invoice or receipt that arrives online is treated as the real document in its data form, not on paper. So the rule is to keep it as data, in a way that lets you find it later and shows nobody has secretly changed it.
Read more →National Tax Agency (NTA)Corporate & income taxThe NTA's "FAQ on Tax Audit Procedures (for general taxpayers)" was revised in July 2026 (Reiwa 8). For on-site audits, the date and time, place, tax type, tax period, purpose and so on are, in principle, notified by telephone or similar means with reasonable advance time before the audit begins. The FAQ also covers notice to the tax representative, changes of date and time, and how cases without advance notice are handled.When tax office staff visit a company or shop to check its books and records, it is called a tax audit. Usually, they phone you before they come to tell you when, where and what they will check. If the day is not convenient, you can sometimes talk with them and change it.
Read more →Ministry of Health, Labour and Welfare (MHLW)Withholding, year-end adjustment & payWith the worker's consent, wages can be paid into an account at a fund transfer service provider designated by the Minister of Health, Labour and Welfare. The MHLW page lists 4 designated providers (as of July 1, 2026 (Reiwa 8); 0 under review). It is one of the ways to receive pay, and an employer cannot force it.Until now, pay was basically given in cash or by bank transfer. Now, if the person says OK, part or all of the pay can also be received in an account like a phone payment app run by a company approved by the government. A company cannot force this.
Read more →National Tax Agency (NTA)Corporate & income taxFrom business years beginning on or after April 1, 2026 (Reiwa 8)In the FY2026 (Reiwa 8) tax reform, the measure for all corporations within the wage increase promotion tax credit was abolished as of March 31, 2026. The requirements for the measure for mid-sized enterprises were revised, and the measure for small and medium-sized enterprises (SMEs) is maintained as is, except that the add-on for education and training expenses is abolished. It applies to business years beginning on or after April 1, 2026.There is a system that lowers a company's taxes a bit when it raises pay. It was reviewed in FY2026, and the system for small companies did not change much. However, the extra discount for spending money on training employees was removed.
Read more →National Tax Agency (NTA)Withholding, year-end adjustment & payFor income arising on or after January 1, 2027 (Reiwa 9)The FY2026 (Reiwa 8) tax reform introduces the Special Defense Income Tax. When withholding agents withhold income tax, they also withhold and pay an amount equal to 1% of the income tax to be withheld. The rate of the Special Reconstruction Income Tax falls to 1.1% (2.1% before the reform) but its taxation period is extended, so the combined rate of 2.1% does not change.Right now, income tax has an add-on to pay for recovery from the earthquake. From 2027 (Reiwa 9), the recovery add-on gets smaller, and a new add-on for national defense is added. The total add-on stays the same size, so the way tax is taken out of your pay does not change.
Read more →National Tax Agency (NTA)Consumption tax & invoicesConsumption tax returns for 2027 (Reiwa 9) and 2028 (Reiwa 10)Under the FY2026 (Reiwa 8) tax reform, a special rule was created for sole proprietors who became taxable business operators from tax-exempt status by registering as qualified invoice issuers. In consumption tax returns for 2027 (Reiwa 9) and 2028 (Reiwa 10), the tax payable can be set at 30% of the tax on sales. Corporations are not covered.The old "20%" rule is ending, and in its place a "30%" rule is being created that only individuals can use. You can use it for just two years: 2027 (Reiwa 9) and 2028 (Reiwa 10).
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