Self-Medication Tax System: purchases of eligible drugs over JPY 12,000 (up to JPY 88,000)Money spent on everyday medicine can sometimes be counted in your tax calculation
This is a special rule for the medical expense deduction that people who take certain health-promoting steps, such as health checkups and vaccinations, can use when they buy eligible OTC drugs (switch OTC drugs, etc.). The deduction is the total annual purchase cost (excluding amounts reimbursed) minus JPY 12,000, up to JPY 88,000. It is an either-or choice with the regular medical expense deduction; the two cannot be combined.
Key points
- Deduction = total cost of specified OTC drugs and the like (excluding amounts reimbursed by insurance benefits, etc.) minus JPY 12,000 (up to JPY 88,000)
- To apply, the filer personally must have taken certain steps (a checkup by the insurer, an employer's regular health checkup, vaccination, specific health checkups, cancer screening, etc.)
- Eligible products are marked as eligible on the receipt, etc. Some also carry a common identification mark on the package
- It is an either-or choice with the regular medical expense deduction. After choosing, you cannot change the choice through a request for correction or an amended return
- Attach the Self-Medication Tax System statement to the tax return. You may be asked to show or submit receipts until the day 5 years have passed
What to do in practice
- To decide which deduction is more favorable, compare your annual medical expenses with your purchases of eligible OTC drugs.
- Keep documents that show you took the steps, such as health checkup result notices and vaccination records.
If you get health checkups and the like properly, and buy eligible cold medicine or stomach medicine at a drugstore, there is a system that lets part of what you spent be subtracted in your tax calculation. You cannot use it at the same time as the deduction for hospital costs; you pick one of the two. It is a method allowed by the rules.
Points
- People who take steps for their health, such as health checkups and vaccinations, can use it
- The part of your total spending on eligible medicine that is over JPY 12,000 becomes the base for the subtraction
- The most you can subtract is JPY 88,000. You pick just one: this or the deduction for hospital costs
What the words mean
- Switch OTC drugs
- Medicines that used to be available only with a doctor's prescription and can now also be bought in stores
- Either-or choice
- Choosing just one of two systems to use
- National Tax Agency: National Tax Agency: No. 1129 When you pay for specified over-the-counter drugs (special rule for the medical expense deduction) [Self-Medication Tax System]
Tax-saving information introduces systems permitted by law. Each has conditions for application, and this is not encouragement of tax avoidance. Please consult a tax accountant or other professional before applying.
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.