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
2023/11/22 1 min read

The National Tax Agency (NTA) in Japan announced on 30 March 2023 a change in interpretation of “the end of the accounting period for which the distribution of profits takes place” under (Article 10, Japan Luxembourg Tax Convention (JLTC)), following a case determined by the Tokyo High Court on 16 February 2023.
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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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