Consumption Tax Adjustment on the Change of Use of Fixed Assets
JAPAN TAX BULLETINFY2026 JCT Reform Update: Extended 8-Year Transitional Deduction Schedule and Reduced JPY 100M Cap for Non-Registered Supplier Purchases
2021/10/19 1 min read

In order to achieve corporate transformation (digital transformation) using digital technology during and after the COVID era, it is essential to implement management and digital strategies in an integrated manner. The 2021 tax reform established a system that allows companies to receive support measures for digital-related investments using cloud technology necessary to realize DX after company wide approval has been granted by the competent minister.
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FY2026 JCT Reform Update: Extended 8-Year Transitional Deduction Schedule and Reduced JPY 100M Cap for Non-Registered Supplier Purchases
Under Japan’s consumption tax rules, input tax credits for "adjustable fixed assets" are credited upon acquisition. However, if the use of assets changes within three years, an adjustment is required.
Revenue recognition is a key performance metric affecting financial figures. This article explores examples of differences between accounting and tax treatment in Japan.
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