The amount threshold for tools and equipment under SME Management Strengthening and Investment Promotion tax incentives rises to JPY 400,000The condition for a tax break on tools changed from "JPY 300,000 or more" to "JPY 400,000 or more"
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.
- Before April 1, 2026 (Reiwa 8)Tools and equipment with an acquisition cost of JPY 300,000 or more qualify
- April 1, 2026 (Reiwa 8) (effective date)The amount requirement changes from this date
- On and after April 1, 2026 (Reiwa 8)For the Management Strengthening Tax Incentive, JPY 400,000 or more is judged by the date of acquisition etc.
- Business years spanning April 1The Investment Promotion Tax Incentive has a transitional measure; judged by whether the business year's total acquisition cost is JPY 1.2 million or more
Key points
- Management Strengthening Tax Incentive (Special Taxation Measures Act, Article 42-12-4): tools, equipment and fixtures acquired etc. on or after April 1, 2026 (Reiwa 8) must have an acquisition cost of JPY 400,000 or more (previously JPY 300,000 or more)
- Investment Promotion Tax Incentive (Special Taxation Measures Act, Article 42-6): now "total of tools costing JPY 400,000 or more per unit must be JPY 1.2 million or more" (previously JPY 300,000 or more)
- The revised Investment Promotion Tax Incentive applies to business years ending on or after April 1, 2026 (Reiwa 8)
- Business years spanning April 1 have a transitional measure: tools acquired before that date costing JPY 300,000 or more can still be included in the total test
- The annual total threshold of JPY 1.2 million itself does not change
What to do in practice
- For acquisitions on or after April 1, 2026 (Reiwa 8), re-screen eligible equipment against the JPY 400,000 line
- For business years spanning April 1, check the transitional measure separately for acquisitions before and after April 1
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.
Points
- Only tools costing JPY 400,000 or more now qualify
- Things bought before April 1, 2026 stay under the old line
- The total level for buying tools together (JPY 1.2 million) does not change
What the words mean
- Acquisition cost (取得価額)
- The price it took to get hold of the item
- Transitional measure (経過措置)
- A special treatment set at the point where rules change, so people don't get confused
- National Tax Agency (NTA): NTA: Outline of FY2026 (Reiwa 8) amendments to corporate tax laws (4. Main revisions to SME tax incentives)
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.