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Japan: 2025 tax reform bills, including Pillar Two rules, passed by Parliament

Measures include introduction of undertaxed profits rule (UTPR) and qualified domestic minimum top-up tax (QDMTT)

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March 31, 2025

The National Diet on March 31, 2025, passed the 2025 tax reform bills.

The main measures in the 2025 tax reform are as follows:

  • Corporate Tax
    • Measures to secure financial resources for strengthening defense capability
    • Taxation of leasing
    • Special measures for reduced corporation tax rate for small and medium-scale companies
  • International tax
    • Global minimum tax
    • Controlled foreign company (CFC) regime
  • Consumption tax (taxation of leasing)
  • Individual tax (individual (personal) reliefs)
  • Preservation system for electromagnetic records related to transaction information of electronic transaction

Read a March 2025 report prepared by the KPMG member firm in Japan

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