The measures currently planned by the Takaichi Cabinet are focusing further strengthening of the economy, while at the same time addressing high inflation rates.

• Regarding corporate tax, measures to promote investment in production facilities have been proposed, where approved investment can be made subject to either immediate depreciation or a 4% or 7% tax credit, with a limit of 20% of the corporate tax amount.
• The R&D tax credit system is also undergoing adjustments, with the addition of a new strategic technology category and revisions to the scope of credits for general R&D and open innovation.
• The government continues to fiscally promote salary increases, however only for SMEs, as inflationary pressures make the measure less favorable.
• Tax incentives to promote open innovation investment will continue with some revisions for another two years.

For SMEs in particular,

• Expansion of scope of special R&D tax credits (max 17%) is to be extended for another three years, and excess amounts over the limit may be carried forward for three years.
• For depreciation of low-value assets the threshold acquisition cost will be raised to less than ¥400,000 from the current less than ¥300,000

For consumption tax,

• The transition period during with a portion on input consumption tax on taxable purchases from non-qualified invoice issuers can still be claimed will be extended by two years a deductible ratio changed. Small proprietors, continue to be relucted to register as qualified invoice issuer.
• In addition, the annual upper limed for purchases per tax-exempt supplier will be reduced to ¥100m (from current ¥1bn) starting from October 1, 2026.
• Import of low value goods, sold by large online platforms with an ex-JCT price of ¥10,000 per item will be subject to local supply consumption tax at the level of the seller.  At the same time, measures will be implemented where these sellers may register as a seller of such low-value goods and assume the JCT liability, exempting the customer from it. The amendment is expected to apply for transactions on or after April 1, 2028.
• A platform-level taxation for marketplaces that act as an intermediate for certain categories of supply will be introduced from this date as well. Platform operators with sales exceeding ¥5bn (JCT included) will be designated as “Type 2 Platform Operators. The designation of ‘specified platform operator” (operators providing platform for the sale of B2C supplied services_  introduced in the 2024 Tax Reform will be changed to Type 1 platform operators.
• Taxes for international travel will be increased from ¥1,000 to ¥3,000 per departure.

Sources:

Ministry of Finance, Outline of Tax Reform

Ministry of Economy, Trade and Industry, Concerning fiscal reform related to economy and industry (December 2025)

PWC, Japan Tax Update: Overview of 2025 Tax proposals, (December 2025) (English)

(Last update: 07-01-26)