Low-value depreciable asset special provision: acquisition cost threshold raised to under JPY 400,000The line for "slightly pricey tools" a company can expense all at once has gone up
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.
Key points
- Acquisition cost threshold: under JPY 300,000 to under JPY 400,000 (assets acquired on or after April 1, 2026)
- Eligible corporations: those with 400 or fewer regularly employed workers (500 or fewer before the revision)
- The total acquisition cost limit remains JPY 3,000,000 per business year (prorated by months for business years under 1 year)
- Applies to assets acquired and put into business use by March 31, 2029 (as stated in No.5408)
- The amount must be expensed in the accounts, and Appended Table 16(7) must be attached to the tax return
What to do in practice
- Reorganize assets of JPY 300,000 or more but under JPY 400,000 acquired on or after April 1, 2026 in the fixed asset ledger as covered by the provision
- Before closing the books, check that the business year total is within JPY 3,000,000 and prepare to attach Appended Table 16(7)
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.
Points
- Items up to JPY 400,000 can be expensed fully in the year bought (with conditions)
- The total for one year is still up to JPY 3,000,000, as before
- The line went up for items bought on or after April 1, 2026
What the words mean
- Expensing
- Subtracting from sales so the profit (the base for tax) is counted smaller
- Small and medium-sized company
- A company that is not very large
- National Tax Agency (NTA): NTA: No.5408 Special Provision for Deducting the Acquisition Cost of Low-Value Depreciable Assets of SMEs as Expenses
- National Tax Agency (NTA): NTA: Outline of Fiscal 2026 (Reiwa 8) Corporate Tax Law Amendments (4. Main review of SME tax measures)
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.