Japan – 2025 Tax Reform Change

On 27 December 2024, the Japanese government approved the 2025 Tax Reform Proposals (the “2025 Tax Reform Proposals”).

There are various changes as detailed below:

• Basic income tax deduction increased to JPY 100,000 for all income levels. For those with dependent children, additional deductions will be available from the 2025 income year.
• Aligned with above, below is basic deduction details
  • JPY 580,000: Less than JPY 23,500,000.
  • JPY 480,000: From JPY 23,500,000 to JPY 24,000,000.
  • JPY 320,000: From JPY 24,000,000 to JPY 24,500,000.
  • JPY 160,000: From JPY 24,500,000 to JPY 25,000,000.
• Mortgage and home renovation deductions for those with dependent children extend to 2025.

Please contact your Mercans’ services delivery team for any additional information regarding the implications of the above change.

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Japan – 2025 Tax Reform Change – 1 January 2025

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