# Japanese tax and social welfare regulation updates

> Live situation record from CLSTR: https://clstr.news/situations/japanese-tax-and-social-welfare-regulation-updates
> Updated: 2026-08-27T01:00:00.000Z. Sources: 6. Developments: 2.

Japanese tax regulations and social welfare guidelines have undergone various updates affecting both individuals and corporations.

For individual taxpayers, the ‘Specific Expense Deduction’ allows for the deduction of necessary business costs, such as work clothes and safety gear, provided the total qualifying expenses exceed half of the standard employment income deduction. Additionally, the self-medication tax system is being expanded and made permanent under the FY2026 tax reform, allowing deductions for annual over-the-counter medicine purchases exceeding 12,000 yen.

Social welfare updates specify that resident tax-exempt households may receive reductions in National Health Insurance and Long-term Care Insurance premiums, with survivor and disability pensions excluded from income calculations for tax status determination. 

In the corporate sector, a reform effective April 1, 2024, increased the threshold for external dining expenses to be classified as meeting expenses rather than entertainment expenses, raising the limit from 5,000 yen to 10,000 yen per person.

## Claims

- 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. (single 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. (single 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. (single 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. (single source)
- Households classified as resident tax-exempt may be eligible for reductions in National Health Insurance premiums and Long-term Care Insurance premiums. (single 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. (single source)

## Timeline

### 2026-08-27: Japan tax regulations update regarding medical deductions and corporate expenses

Updates to Japanese tax laws include a higher 10,000 yen threshold for corporate meeting expenses, permanent status for the self-medication tax system, and various benefits for resident tax-exempt households.

4 sources. https://clstr.news/cluster/japan-tax-regulations-update-regarding-medical-deductions-and-corporate-expenses

### 2026-08-21: Japan tax rules: Deducting work clothes expenses

Japanese employees may claim tax deductions for work clothes through the ‘Specific Expense Deduction’ if costs exceed certain thresholds and are certified by their employer.

2 sources. https://clstr.news/cluster/japan-tax-rules-deducting-work-clothes-expenses

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Cite as: Japanese tax and social welfare regulation updates. CLSTR, https://clstr.news/situations/japanese-tax-and-social-welfare-regulation-updates