This is a translation of the Japanese original. The Japanese version is authoritative; figures follow Japanese tax law.
Apple releases the folding iPhone Duo in Japan on 23 October. The 512GB model costs 399,800 yen, exactly 200 yen below the new "under 400,000 yen, expense it all at once" line that took effect in April 2026. A 20 September article by a Japanese legal news site drew more than 300 comments, split between "you get it basically for free" and "no way it is that simple". The short answer: blue-return sole proprietors and small companies can expense the 256GB and 512GB models in full in the year of purchase. The 1TB and 2TB models do not qualify even on a pre-tax basis, and white-return filers and salaried workers whose side income is "miscellaneous income" cannot use the rule at all. And "deductible" is not the same as "free". Here is who qualifies, who does not, and how much actually comes back, from National Tax Agency and Ministry of Finance sources.
Bottom line: 256GB and 512GB qualify. You get back 15 to 43 percent of the price
"Expensing it in full" means you can deduct the roughly 400,000 yen from this year's taxable income. What comes back is that amount times your tax rate; the rest is your own money. Compared with not using the rule, the only difference is timing: deduct a little each year over ten years, or deduct it all this year. The total you can deduct is the same.
What "under 400,000 yen, fully deductible" actually is
Normally, equipment costing 100,000 yen or more cannot be expensed in the year you buy it; you spread it over its statutory useful life (depreciation). But small businesses that file blue returns have a special rule that lets them expense assets under a set amount in the year of purchase. The 2026 tax reform raised that ceiling from under 300,000 yen to under 400,000 yen[MOF]. The National Tax Agency's guidance has been updated too: assets acquired on or after 1 April 2026 qualify at 100,000 yen or more and under 400,000 yen, and the rule runs until 31 March 2029[NTA No.2100].
| Item | Detail |
|---|---|
| Who | Blue-return sole proprietors, and companies with capital of 100 million yen or less and 400 or fewer regular employees |
| Which assets | Acquisition cost of 100,000 yen or more and under 400,000 yen (under 300,000 yen if acquired by 31 March 2026) |
| Annual cap | 3 million yen in total |
| Until when | Assets acquired and put into business use by 31 March 2029 |
| Paperwork | Individuals note it in the depreciation section of the blue-return statement; companies attach schedule 16(7) |
The background to the reform, and what happens to assets of 300,000 to 400,000 yen already being depreciated, are covered in our article on the 400,000 yen small-asset rule. This article focuses on where iPhone Duo buyers actually trip up.
The four models: 1TB and above miss even on a pre-tax basis
Apple's official Japanese prices are below[Apple]. The under-400,000-yen test uses the acquisition cost, and whether that cost includes consumption tax depends on how you account for the tax. An NTA circular states that the thresholds for small depreciable assets are judged "at the amount calculated under the tax-exclusive or tax-inclusive method the business applies"[NTA circular]. The same logic applies to sole proprietors, and businesses exempt from consumption tax can only use the tax-inclusive method, so they test the tax-inclusive price.
| Model | Price incl. tax | Excl. tax | Tax-inclusive / exempt | Tax-exclusive |
|---|---|---|---|---|
| 256GB | 364,800 yen | approx. 331,636 yen | Qualifies | Qualifies |
| 512GB | 399,800 yen | approx. 363,455 yen | Qualifies (by 200 yen) | Qualifies |
| 1TB | 469,800 yen | approx. 427,091 yen | Does not | Does not |
| 2TB | 574,800 yen | approx. 522,545 yen | Does not | Does not |
Some people assume the 1TB model squeaks in on a tax-exclusive basis. It does not: 469,800 divided by 1.1 is about 427,000 yen, still over 400,000. The 1TB and 2TB models are ordinary depreciable assets regardless of accounting method.
Pitfall 1: White-return filers and side-income earners with "miscellaneous income" cannot use it
The rule is for blue-return filers only[NTA No.2100]. A white-return sole proprietor spreads the 399,800 yen over the statutory useful life. For a phone, the common view is that it falls under "telephone equipment and other communication devices, other" in the useful-life table, giving 10 years; some treat it like a computer at 4 years if that is how it is used[NTA useful-life table]. Decide based on actual use and check with the tax office or a tax accountant if unsure.
White return, put into use on 23 October (10 years, straight line)
One year of depreciation: 399,800 yen × 0.100 = 39,980 yen
For 2026, three months from October to December: 39,980 × 3/12 = about 10,000 yen
On a 4-year life, one year is 99,950 yen and 2026 gets about 25,000 yen. Only the blue-return special rule lets you deduct the full 399,800 yen this year.
Salaried workers with a side business hit the same wall. If the side income is miscellaneous income, you cannot file a blue return at all, so the rule is unavailable. You can still deduct depreciation as a necessary expense, but only a few tens of thousands of yen a year as above. Where the line between business income and miscellaneous income falls is covered in our guide to filing for side income.
The deadline to apply for blue-return approval for the 2026 tax year was 16 March 2026 and has passed. If you file white this year, buying an iPhone Duo in 2026 will not get you the rule. But the rule runs to 31 March 2029, so if you buy in 2027 and submit the blue-return application by 15 March 2027, you can expense it in full for 2027. The procedure is explained in blue return versus white return.
Pitfall 2: The private-use share is not deductible
Most sole proprietors use one phone for both work and private life. In that case only the business-use share is deductible. The NTA explains that for costs serving both household and business purposes, only the part that is necessary for the business and can be clearly separated may be treated as a necessary expense[NTA No.2210].
The important point is a two-step logic: the under-400,000-yen test is applied to the device's full acquisition cost (399,800 yen), while the deductible amount is that cost multiplied by the business-use ratio.
512GB used 70 percent for business, 30 percent privately
Test: acquisition cost 399,800 yen < 400,000 yen → qualifies
Deduction: 399,800 yen × 70% = 279,860 yen (the remaining 119,940 yen is not deductible)
You need evidence for the ratio: call and data records, hours of use, and so on. How to think about borderline expenses is covered in ten grey-area expenses for sole proprietors.
Pitfall 3: Pre-ordering is not enough. The date you start using it decides
The rule requires that you acquire the asset and put it into business use. Ordering when pre-orders open on 16 October does nothing by itself; the expense belongs to the year the device arrives and you start using it for work. With a 23 October release most buyers will land in 2026, but if stock runs short and yours arrives in January, it becomes a 2027 expense.
Companies look at the fiscal year. A December year-end company must start using it by 31 December; a March year-end company has until the end of March. If you are thinking "we will have a profit this year", check the delivery date against your year-end.
Buying on instalments does not change the acquisition cost, which is the full device price (instalment fees are a separate expense when paid). Carrier plans where the remaining balance is waived if you return the handset after a set period transfer ownership differently from a normal purchase, so it is safer to have a tax accountant confirm the treatment.
Pitfall 4: Fully expensed for income tax, but still reportable for fixed asset tax
This is an income tax and corporate tax rule. It does not apply to fixed asset tax on depreciable assets. The Tokyo Metropolitan Tax Bureau states that assets immediately written off under the small-business rule "can be deducted for tax purposes but the treatment does not apply to fixed asset tax (depreciable assets)" and includes them in the return, whereas assets under 200,000 yen written off over three years and assets under 100,000 yen need not be reported[Tokyo Tax Bureau].
So if you expense an iPhone Duo under the rule, it goes on your depreciable-asset return due by 31 January each year. Tax is only charged when the total taxable base reaches 1.5 million yen, at 1.4 percent. One phone alone will not get there, so the cost is paperwork rather than money. Businesses with other equipment or fit-out should check whether the total crosses 1.5 million yen. The mechanics are in how fixed asset tax is calculated.
Pitfall 5: The 3 million yen annual cap. Seven 512GB units at most
The rule covers up to 3 million yen in total per year (per fiscal year for companies)[NTA No.5408]. Seven units at 399,800 yen come to 2,798,600 yen and fit; the eighth takes you to 3,198,400 yen and over. Assets beyond the cap go through ordinary depreciation, or three-year lump depreciation if under 200,000 yen.
The cap is shared with every other asset you expensed under the rule this year: computers, cameras, desks. If you have already used part of the cap, check the remainder before buying.
"Deductible" is not "free". How much really comes back
When you deduct 399,800 yen, the tax you save is that amount times your tax rate. Japan's income tax runs from 5 to 45 percent by bracket[NTA No.2260] and resident tax is a flat 10 percent, so for a device used 100 percent for business the rough figures are:
| Taxable income (before the deduction) | Income + resident tax | Tax saved (approx.) | Net cost to you |
|---|---|---|---|
| Up to 1.95 million yen | 15% | approx. 60,000 yen | approx. 340,000 yen |
| 1.95 to 3.3 million yen | 20% | approx. 80,000 yen | approx. 320,000 yen |
| 3.3 to 6.95 million yen | 30% | approx. 120,000 yen | approx. 280,000 yen |
| 6.95 to 9 million yen | 33% | approx. 130,000 yen | approx. 270,000 yen |
| 9 to 18 million yen | 43% | approx. 170,000 yen | approx. 230,000 yen |
Assumes 100 percent business use; the 2.1 percent reconstruction surtax is omitted. If the deduction drops you into a lower bracket the saving is smaller. Sole proprietors also see lower National Health Insurance premiums (income-based portion) and enterprise tax, so the real effect is somewhat larger.
Even in the most common 3.3 to 6.95 million yen bracket, you get back about 120,000 yen and pay 280,000 yourself. And without the rule, the same 399,800 yen is deductible anyway over ten years. The value of the rule is not that tax disappears, but that you can pull the deduction forward into a profitable year. If your income is low or you are in a loss this year, skipping the rule and depreciating normally, saving the deductions for later years, can be the better choice.
The rule suits you if
- This year's profit is large and you are in a high bracket
- You were replacing a work phone anyway
- You file a blue return and can justify the business ratio
It does not suit you if
- Your income is low or negative this year (nothing to deduct against)
- "I can expense it" is the main reason you are buying
- You file a white return, or your side income is miscellaneous income
Three checks when a company buys it
- Buy in the company's name. A director paying with a personal card and using the phone for work does not make it a company asset. The company must be the purchaser.
- Confirm capital of 100 million yen or less, 400 or fewer employees, and blue-return status. The employee threshold was tightened from 500 to 400 in the 2026 reform[MOF].
- Attach schedule 16(7) to the tax return. Without it the rule is not allowed[NTA No.5408]. If a director also uses the phone privately it may be taxed as salary, so keep a written business-use-only policy.
The usual bookkeeping is to record the purchase as tools and equipment, then transfer the full amount to depreciation expense at year-end. See account titles and journal entries.
Selling it later counts as capital gains
If you sell the iPhone Duo a few years on, a sole proprietor's gain is not business income but capital gains under comprehensive taxation. Because the fully expensed device has a cost basis near zero, almost the whole sale price is a gain, but comprehensive capital gains carry an annual special deduction of 500,000 yen, so with no other asset sales there is normally no tax[NTA No.3152]. For a company the sale price is simply taxable income.
What to do today
- Check whether you file blue or white this year. If white, the rule is off for 2026; consider buying in the new year and applying for blue status by 15 March 2027.
- Check your consumption-tax accounting method and how much of the 3 million yen cap you have already used. Exempt businesses test the tax-inclusive price.
- Decide how you will justify the business ratio. Note the work line, hours and uses now so you are not guessing after the purchase.
Frequently asked questions
If I use tax-exclusive accounting, does the 1TB model (469,800 yen) fall under 400,000 yen?
No. 469,800 divided by 1.1 is about 427,091 yen, still over 400,000. The 1TB and 2TB models are ordinary depreciable assets (10-year or 4-year life) whatever your accounting method. Only the 256GB and 512GB models fall under 400,000 yen.
Can I still expense the full amount this year if I buy on a 24- or 36-month carrier instalment plan?
With an ordinary instalment plan, yes. The acquisition cost is the full device price, so a blue-return small business can expense it in the year of purchase even if payments are still running. Plans that waive the remaining balance when you return the handset after a set period treat ownership differently, so confirm with a tax accountant or the tax office.
I am an employee with a side business. If I buy it for the side business, can I expense 399,800 yen?
If the side income is miscellaneous income you cannot file a blue return, so the rule is unavailable. The most you can deduct is the business-use share of ordinary depreciation (about 40,000 yen a year on a 10-year life, times your business ratio). If the side activity qualifies as business income and you file a blue return, the rule is available.
After expensing it in full, is there any paperwork beyond the income tax return?
Yes, the fixed asset tax return for depreciable assets. Assets immediately written off under the rule are reportable: you declare assets held on 1 January to your municipality (the metropolitan tax office in Tokyo's 23 wards) by 31 January. No tax is charged if the total taxable base is under 1.5 million yen, but the return itself is generally still required.
Sources
This article is based on the following materials. Rules change, so confirm the latest before filing.
This article is general information, not tax advice. Useful-life classification, business-use ratios and the treatment of carrier contracts depend on individual circumstances. Consult the tax office or a tax accountant if in doubt.
