Consumption Tax Adjustment on the Change of Use of Fixed Assets
FY2026 JCT Reform Update: Extended 8-Year Transitional Deduction Schedule and Reduced JPY 100M Cap for Non-Registered Supplier Purchases
2022/12/19 1 min read

In Japan, legislation related to stock-based compensation has been developed in recent years, and an increasing number of companies are adopting stock-based compensation. Restricted Stock Units (RSUs), which are considered effective for retention and Long Term Incentives, became deductible under the 2017 tax reform.
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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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