Introduction of the Special Defense Income Tax and a Lower Rate for the Special Reconstruction Income Tax: From January 2027 (Reiwa 9)What is inside the tax "add-on" changes from 2027
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.
- Income tax amount
- JPY 10,000
- Special Defense Income Tax (1%)
- JPY 100
- Special Reconstruction Income Tax (1.1%)
- JPY 110
- Total surcharge (2.1%)
- JPY 210
Key points
- The Special Defense Income Tax rate is 1% of the income tax to be withheld. It is paid together with income tax by the statutory due date for income tax
- The Special Reconstruction Income Tax rate is 1.1% (2.1% before the reform), and its taxation period is extended by 10 years to December 31, 2057 (Reiwa 39) (December 31, 2037 (Reiwa 19) before the reform)
- The combined rate stays at 2.1% before and after the reform, and the method of calculating withholding tax does not change
- For salaries payable on or after January 1, 2027 (Reiwa 9), use the "2027 (Reiwa 9) withholding tax table"
What to do in practice
- Set up payroll to use the 2027 (Reiwa 9) withholding tax table from salaries paid in January 2027
- Check account names and labels on payment slips and in accounting entries (the Special Defense Income Tax is added)
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.
Points
- The recovery add-on goes down from 2.1% to 1.1%
- A new 1% add-on for defense is added
- Together it is the same 2.1% as before, and the recovery add-on lasts 10 years longer
What the words mean
- Special Reconstruction Income Tax
- A tax added on top of income tax to pay for recovery from the Great East Japan Earthquake
- Special Defense Income Tax
- A new tax added on top of income tax from 2027 (Reiwa 9) to pay for national defense
- National Tax Agency (NTA): NTA: How to Do the 2026 (Reiwa 8) Year-End Adjustment (Part IV: Withholding on 2027 (Reiwa 9) Salaries)
- National Tax Agency (NTA): NTA: April 2026 (Reiwa 8) Overview of Withholding Income Tax Amendments
This article summarizes and explains materials published by government agencies and is not advice on any individual case. Rules can change, so for actual procedures and decisions always check the latest original materials and consult professionals such as tax accountants or labor and social security attorneys. English, Simplified Chinese and Traditional Chinese versions are translations prepared from the Japanese articles for convenience. If anything differs, the Japanese text and the original source take precedence.