started · updated
Japan tax regulations update regarding medical deductions and corporate expenses
Recent updates to Japanese tax regulations and social welfare systems provide new guidelines for household finances and corporate accounting.
For individuals, the self-medication tax system is being expanded and made permanent for switch OTC medicines under the FY2026 tax reform. This system allows for deductions on annual OTC medicine purchases exceeding 12,000 yen, serving as an alternative to the standard medical expense deduction, which typically requires spending over 100,000 yen.
Regarding social welfare, households classified as resident tax-exempt are eligible for various benefits, including reductions in National Health Insurance and Long-term Care Insurance premiums. Notably, survivor and disability pensions are excluded from the income calculations used to determine resident tax status.
In the corporate sector, a tax reform effective April 1, 2024, has increased the threshold for external dining expenses to be treated as meeting expenses rather than entertainment expenses. The limit has been raised from 5,000 yen to 10,000 yen per person to account for inflation and reduce administrative burdens.
Entities
Claims
What the coverage asserts, and how many sources carry each claim.
- [○ 1 SOURCE] Households classified as resident tax-exempt may be eligible for reductions in National Health Insurance premiums and Long-term Care Insurance premiums. limo.media
- [○ 1 SOURCE] Survivor's pensions and disability pensions are treated as non-taxable income and are excluded from the income calculation used to determine resident tax status. limo.media
- [○ 1 SOURCE] Under the FY2026 tax reform, the application deadline for switch OTC medicines in the self-medication tax system has been abolished, making it permanent. kurotax.jp
- [○ 1 SOURCE] The self-medication tax system allows for a deduction of the amount by which annual purchases of eligible OTC medicines exceed 12,000 yen. kurotax.jp
- [○ 1 SOURCE] The threshold for external dining expenses to be classified as meeting, rather than entertainment, was raised from 5,000 yen to 10,000 yen as of April 1, 2024. zuuonline.com
- [○ 1 SOURCE] The medical expense deduction allows individuals to deduct expenses exceeding 100,000 yen (or 5% of total income for those earning less than 2 million yen) from their taxable income. kurotax.jp