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Japan: 2026 tax reform bills passed by National Diet

New corporate, international, consumption, and individual tax measures

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march 31, 2026

Japan's National Diet (legislature) passed comprehensive tax reform bills on March 31, 2026, following a delay in budget deliberations that led to a provisional budget. Main highlights of the 2026 tax reform include the following:

  • Corporate tax: Key developments include special measures to promote investment in productivity-enhancing facilities, tax credits for research and development (R&D) costs, and incentives to promote salary increases. Restrictions on eligible companies for certain special tax measures are also part of the reform, along with special measures for promoting domestic production in strategic fields, fostering open innovation, and ensuring the preservation of documents related to transactions within corporate groups.
  • International tax: The reform incorporates provisions related to the global minimum tax, aligned with international agreements, and addresses the controlled foreign company (CFC) regime. Special measures for foreign partners of investment funds are also included.
  • Consumption tax: Changes focus on the taxation of cross-border electronic commerce and services related to real estate located in Japan.
  • Individual tax: The reform covers individual (personal) tax relief, tax measures aimed at securing financial resources for strengthening defense capabilities (a special defense income tax), provisions for a fair tax burden on extremely high-level income, and cryptoassets.

Read a March 2026 report prepared by the KPMG member firm in Japan

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