Japan Register Subsidy for 1% Food Tax: Up to ¥3.5M (2026)

Smart Register and POS Register types: ¥500,000 for one function, ¥3.5 million for two or more

The food tax cut was set out in an outline approved by the Cabinet on 15 September 2026. The bill was submitted to the Diet on 9 October and referred to the House of Representatives Committee on Financial Affairs on 20 October. As of 9 November, the "examination completed" and "result" fields on the House of Representatives bill page are still blank[House of Representatives, bill progress (in Japanese)].

The subsidy materials do not say what happens if the bill does not pass. The covered costs also include "modifications that let the system respond flexibly to future consumption tax rate changes."

*SMEs are defined as in the existing categories. Retail (including restaurants): capital of ¥50 million or less or 50 employees or fewer; services: ¥50 million or less or 100 employees or fewer. Small businesses: 5 employees or fewer in commerce and services (excluding accommodation and entertainment), 20 or fewer in accommodation, entertainment, manufacturing and others[Secretariat, application guidelines, Invoice category (in Japanese)].

Some mid-sized companies that are not large enterprises also qualify. Food retailers with 2,000 employees or fewer and an equity ratio below 40%, among other conditions, can receive a subsidy for modifying POS registers and ordering systems only, up to ¥25 million at 1/3[METI, response to the temporary food tax cut (in Japanese)].

"Functions" means accounting, payment and ordering; modifications count by the systems you fix

Whether the cap is ¥500,000 or ¥3.5 million depends on the number of functions. When you install new software, count which of "accounting," "payment" and "ordering" it has. If two programs share a function, it counts once.

For modifications, count the types of systems you modify. If you both install and modify, add the two counts.

*Estimates calculated at 3/4 (4/5 for small businesses) for the first ¥500,000 of subsidy and 2/3 for the rest. This follows the existing Invoice category guidelines; guidelines for the new types have not been published yet.

Covered and non-covered costs: ticket machines only under the POS Register type

A new register must be installed by one registered IT vendor (IT Donyu Shien Jigyosha) using a registered tool. The tool only needs to be registered by the time you apply, so before signing, ask the vendor whether it will register the product for the Smart Register or POS Register type[Secretariat FAQ, Smart Register and POS Register types (in Japanese)].

Modifying your current register or systems is covered even if the contractor is not registered. However, if the quote from one contractor totals ¥500,000 or more (excluding tax), you should in principle get competing quotes. If you choose someone other than the cheapest, or have only one quote, you submit a statement of reasons for the selection. Quotes without a breakdown, such as "modification work, lump sum," are not accepted.

Each business can apply only once and cannot apply under both types. Businesses that have already applied for a smart register (or, for the POS Register type, a POS register) under another category of the 2026 subsidy are also excluded, unless that application was rejected.

Your current register provider may switch the tax rate through an update at no extra cost. If changing a setting yourself is enough, there is nothing to subsidize. Check your provider's notice first.

Applications open in mid-January 2027: six steps from contract to payment

You apply only once, after installation or modification and payment are all complete. The application doubles as the completion report. Unlike existing categories, you do not enter it jointly with the vendor; you apply yourself from your own account page. You need a gBizID Prime account.

These are the documents to submit with the application. Many papers from contract to payment cannot be collected again later, so save them the day you receive them.

• Everyone: contract or purchase order (dated 15 September 2026 or later), invoice (dated after the contract and on or before payment), proof that the transfer was completed, and a bankbook cover or similar showing the account to receive the subsidy
• If you install software: a screenshot showing the software name and your business name
• If you buy hardware: a delivery note dated 15 September 2026 or later, and a photo of the installed device with this subsidy's label attached
• If you modify systems: quotes, a statement of reasons for the selection, documents showing you used the system before the modification (such as the original contract), a description of its functions before the modification, installation photos and screenshots, and a system diagram showing how the register is linked to ordering and other systems
• Sole proprietors: a driver's license or similar, a tax payment certificate for income tax (form 1 or form 2), and a copy of the final tax return (for 2025 or 2026). Corporations submit a certificate of registered matters and a tax payment certificate for corporate tax

Starting early does not guarantee the subsidy. The secretariat's FAQ says applications may be rejected if requirements are not met or documents are missing.

The subsidy you receive is taxed as business income. For the part used to buy fixed assets such as register terminals, you may be able to spread out the tax in the year of purchase with a reduction entry (asshuku kicho) (see our guide to subsidies and grants). Sales-promotion costs such as flyers are covered by a separate subsidy, the Small Business Sustainability Subsidy, and local government subsidies can be searched in our subsidy database.

What to change in the register: tax rate settings, receipts and invoices spanning two months

The 1% rate applies to food and beverages now taxed at the reduced rate of 8%, and the scope does not change. Eating out and alcohol stay at 10%, and newspaper subscriptions stay at 8% (see the food consumption tax cut). Registers mainly need four changes.

• Tax rate settings: switch items registered at 8% to 1% from 1 April 2027. The same switch is needed when the rate returns to 8% in April 2029
• Takeout vs eat-in: the gap widens to 1% vs 10% (see the 10% eat-in vs 1% takeout gap)
• Receipts: show 1% as the applicable rate and the tax calculated at 1%. The existing "reduced-rate item" mark can still be used
• Monthly invoices: invoices that mix 8% and 1% transactions, such as for 16 March to 15 April, must show each rate separately

*Receipts and invoices: National Tax Agency, Q&A on the two-year food tax cut, questions 2-1 and 2-2 (assuming the bill is enacted)[National Tax Agency Q&A (in Japanese)].

From 1 February to 31 May 2027, a special rule lets shops show tax-inclusive prices at either 8% or 1% (see our 1% price quick-reference table). Which items become 1% is covered in our list of 8% vs 10% borderline cases, and decisions about becoming a taxable business or claiming refunds in what businesses should do for the 1% food rate.

Summary

• Installing or modifying registers and linked ordering and invoice-management systems is subsidized up to ¥500,000 for one function and ¥3.5 million for two or more
• The rate is 3/4 for the first ¥500,000 (4/5 for small businesses) and 2/3 above that; hardware is up to ¥200,000 at 1/2
• Contracts on or after 15 September 2026 are covered, and you apply from mid-January to around March 2027 after paying
• New registers must come from registered vendors and tools; modifications may use unregistered contractors, but quotes of ¥500,000 or more need competing quotes in principle
• Keep contracts, invoices, payment records, delivery notes and photos, and do not pay in cash or installments

References (sources)

• SME Digitalization and AI Introduction Support Secretariat, launch of the Smart Register and POS Register types (29 October 2026, in Japanese)
• Same secretariat, FAQ for the Smart Register and POS Register types (updated 29 October 2026, in Japanese)
• Same secretariat, 2026 application guidelines, Invoice category (from the 7th round, in Japanese)
• Small and Medium Enterprise Agency, support for smart registers (advance-start system) (15 September 2026, in Japanese) / flyer
• METI, response to the temporary food tax cut (for mid-sized companies, in Japanese)
• SME Support, JAPAN, J-Net21 news on the advance-start system (in Japanese)
• House of Representatives, progress of the bill on the temporary food consumption tax cut and the worker burden relief payment (in Japanese)
• National Tax Agency, Q&A on the two-year food consumption tax cut (September 2026, in Japanese)

*This article provides general information based on materials published by the Small and Medium Enterprise Agency, METI, the SME Digitalization and AI Introduction Support Secretariat, the National Tax Agency and the House of Representatives as of 9 November 2026. The guidelines for the new types have not been published, and the covered period, application period and covered costs may change. The secretariat's review decides eligibility. For individual cases, ask the secretariat's call center or a specialist such as a tax accountant.