FY2026 Tax Reform Summary｜Impact on Households and Businesses

The "income wall": ¥1.03M → ¥1.23M

A review of the basic deduction and others raises the income-tax threshold and the dependent standard. We explain the impact on take-home pay.

The dependent deduction and the new special deduction for specified relatives

The income standard for dependents rises to ¥1.23M. A new system continues the deduction up to ¥1.5M for the university-student age group.

Child and childcare support levy deducted from salary

Collection begins as an add-on to health insurance premiums. We explain how much is deducted and how it works.

How the defense tax increase works and its impact on take-home pay

Add-ons to corporate tax, tobacco tax and income tax. We lay out when and how much it will affect take-home pay.

End of the invoice system "20% special rule"

The burden-reduction measure for small businesses ends in September of Reiwa 8. How to choose between the standard and simplified methods afterward.

Small-amount depreciation special rule: ¥300,000 → ¥400,000

The cap that small and medium businesses can expense in a lump sum is set to be raised, and the deadline extended.

Micro-corporations and social insurance premiums

A neutral explanation of how social insurance premium optimization works, along with the risks and cautions.

Policy for separate self-assessment taxation of crypto assets (about 20%)

Currently treated as miscellaneous income under comprehensive taxation (up to about 55%). Moving to separate taxation is still at the policy stage of the tax reform outline.

Is now the time to buy an EV? Automobile tax reform

Trends in the environmental performance levy, and the issues around an EV tax increase expected from 2028.

Tax returns for stocks and NISA

Choosing between specified accounts, profit-and-loss aggregation, and loss carryover. Making use of the NISA tax-free allowance.